Tds on consultancy charges paid to resident of bahrain
This query is : Resolved
11 January 2017
We are paying Rs.1000000 o a resident of Bahrain for Consultancy Charges so please suggest me How much will be TDS Amount
Please provide the rate of TDS for Consultancy Charegs Paid to a Non Resident.
Please provide the rate of TDS for Consultancy Charegs Paid to a Non Resident.
11 January 2017
You are required to deduct TDS @ 30% under section 195 of Income Tax Act
11 January 2017
We have only Tax Exchange information agreement with with Baharin. If u can obtain PAN and No PE declaration from the part. Tds is 10.82%. Elseif pan is not there 20%. if No PE is not there Sec 44DA applicable hence TDS based on assessee Constitution ie.30 or 40% plus surcharge and cess
12 January 2017
Please give clear ans 30% or 40%
12 January 2017
The given details is not sufficient for me to conclude the TDS rate. Want a few more details to conclude and needs to understand nature of consultancy services. Also needs to know,
1) Nature of consultancy services
2) whether the Payee has any permanent establishment in India, what i mentioned earlier "PE",
3) whether Payee has a PAN in India.
4) Constitution of Payee, ie Individual or company etc
If you can provide above details, I can provide you the applicable TDS rate
1) Nature of consultancy services
2) whether the Payee has any permanent establishment in India, what i mentioned earlier "PE",
3) whether Payee has a PAN in India.
4) Constitution of Payee, ie Individual or company etc
If you can provide above details, I can provide you the applicable TDS rate
12 January 2017
1. Management Consulltancy
2. payee not have PE
3. Payee Not have PAn
4. Individual
2. payee not have PE
3. Payee Not have PAn
4. Individual
13 January 2017
@ Ajay before taking any decision I suggest you to go through section 195
You may also refer the following link https://www.bankbazaar.com/tax/section-195.html
You may also refer the following link https://www.bankbazaar.com/tax/section-195.html
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13 January 2017
Insertion of new section 206A.
52. After section 206 of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2005, namely:—
"206A. Furnishing of quarterly return in respect of payment of interest to residents without deduction of tax.— (1) Any banking company or co-operative society or public company referred to in the proviso to clause (i) of sub-section (3) of section 194A responsible for paying to a resident any income not exceeding five thousand rupees by way of interest (other than interest on securities), shall prepare quarterly returns for the period ending on the 30th June, the 30th September, the 31st December and the 31st March in each financial year and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such autho-rity the quarterly returns as aforesaid, in the prescribed form, verified in such manner and within such time as may be prescribed, on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media.
(2) The Central Government may, by notification in the Official Gazette, require any person other than a person mentioned in sub-section (1) responsible for paying to a resident any income liable for deduction of tax at source under Chapter XVII, to prepare and deliver or cause to be delivered quarterly returns in the prescribed form and verified in such manner and within such time as may be prescribed, to the prescribed income-tax authority or the person authorised by such authority on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media.".
52. After section 206 of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2005, namely:—
"206A. Furnishing of quarterly return in respect of payment of interest to residents without deduction of tax.— (1) Any banking company or co-operative society or public company referred to in the proviso to clause (i) of sub-section (3) of section 194A responsible for paying to a resident any income not exceeding five thousand rupees by way of interest (other than interest on securities), shall prepare quarterly returns for the period ending on the 30th June, the 30th September, the 31st December and the 31st March in each financial year and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such autho-rity the quarterly returns as aforesaid, in the prescribed form, verified in such manner and within such time as may be prescribed, on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media.
(2) The Central Government may, by notification in the Official Gazette, require any person other than a person mentioned in sub-section (1) responsible for paying to a resident any income liable for deduction of tax at source under Chapter XVII, to prepare and deliver or cause to be delivered quarterly returns in the prescribed form and verified in such manner and within such time as may be prescribed, to the prescribed income-tax authority or the person authorised by such authority on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media.".
13 January 2017
Rate of TDS under Section 195:
Rates prescribed under the Act has to be increased by surcharge and education cess at the prescribed rate. If the payment is being made as per DTAA rates, then there is no need to add surcharge and education cess. The rates are as follows:
Particulars TDS rates
Income in respect of investment made by a NRI 20%
Income by the way of long term capital gains in Section 115E in case of a NRI 10%
Income by way of long-term capital gains 10%
Short Term Capital gains under section 111A 15%
Any other income by way of long-term capital gains 20%
Interest payable on money borrowed in Foreign Currency 20%
Income by way of royalty payable by Government or an Indian concern 10%
Income by way of royalty, not being royalty of the nature referred to be payable by Government or an Indian concern 10%
Income by way of fees for technical services payable by Government or an Indian concern 10%
Any other income 30%
Can I Deduct @10% or 30%
Rates prescribed under the Act has to be increased by surcharge and education cess at the prescribed rate. If the payment is being made as per DTAA rates, then there is no need to add surcharge and education cess. The rates are as follows:
Particulars TDS rates
Income in respect of investment made by a NRI 20%
Income by the way of long term capital gains in Section 115E in case of a NRI 10%
Income by way of long-term capital gains 10%
Short Term Capital gains under section 111A 15%
Any other income by way of long-term capital gains 20%
Interest payable on money borrowed in Foreign Currency 20%
Income by way of royalty payable by Government or an Indian concern 10%
Income by way of royalty, not being royalty of the nature referred to be payable by Government or an Indian concern 10%
Income by way of fees for technical services payable by Government or an Indian concern 10%
Any other income 30%
Can I Deduct @10% or 30%
13 January 2017
What is the nature/description of the service rendered by Bahrin's person
13 January 2017
Consultancy For New Project of SOlar Plant
13 January 2017
My opinion described above based on your clarification and my assumptions that:
1) Counter part has NO PE
2) He will not be resident in India
3) He is rendering service by sitting abroad
4) He don't have PAN in India
5) He is rendering Management Consultancy Charges
Is above points are correct, my conclusion is you need to deduct TDS @20%
Sec 115A(1) - Dedecut TDS @10% plus applicable Surcharge & Cess on FTS/ Royalty not taxable u/s 44DA
Sec 206A - If PAN is not there TDS is applicable rate or 20% whichever is higher
Hence 20%
1) Counter part has NO PE
2) He will not be resident in India
3) He is rendering service by sitting abroad
4) He don't have PAN in India
5) He is rendering Management Consultancy Charges
Is above points are correct, my conclusion is you need to deduct TDS @20%
Sec 115A(1) - Dedecut TDS @10% plus applicable Surcharge & Cess on FTS/ Royalty not taxable u/s 44DA
Sec 206A - If PAN is not there TDS is applicable rate or 20% whichever is higher
Hence 20%
13 January 2017
If it is technical then 10% otherwise 30%. Surcharge extra. If you are deducting 10% then You should have an agreement for services which can prove that the service provided was a technical service
15 January 2017
Deduct 10% under fees for technical services. No need for deduct 20% for want of PAN as per recent amendment, obtain TAN No. of their country instead of PAN.
15 January 2017
But India has no DTAA with Bharain
16 January 2017
Seetharaman Sir is right. As per Sec 206AA(7), failure to furnish PAN, leads to 20% TDS is not appicable for them. So you can deduct 10% plus cess & Surcharge. Surcharge if required
16 January 2017
It is only 10% without DTAA.
16 January 2017
Sir Please Correct me If I am Wrong, 10% is the only tax rate. Why we need not to add Cess and Surcharge on above, as Sec 195 says deduct the tax which is payable in India
16 January 2017
I am mentioning only tax rate, cess can be added unless the rate is as per DTAA.
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