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Applicability of cess on tds under dtaa

This query is : Resolved 

06 February 2014 Dear Professionals,

I have an confusion regarding applicability of Cess on TDS under section 195 under DTAA.

You are request to tell, is cess applicable on rate defined under DTAA?

Regards
Anil

06 February 2014 no..it wont apply. The DTAA rate includes the cess. However, it doesn't include any penalty or interest..

06 February 2014 In case where DTAA is silent about the surcharge and education cess for the purpose of deduction of tax at source, taxpayer can take advantage of that provision in the DTAA for deduction of tax.
Withholding Tax rates may be limited by application of a tax treaty. The surcharge and education cess will not apply where the withholding tax is limited by a tax treaty.




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