Foregn remittance
This query is : Resolved
18 February 2014
Sir
Inrespect of NRI settled in Canada wants to transfer Rs 5 Lakhs earned by him in India as rental income to Canada. Whether this attarct TDS and if so at what rate?.
Rgds
Inrespect of NRI settled in Canada wants to transfer Rs 5 Lakhs earned by him in India as rental income to Canada. Whether this attarct TDS and if so at what rate?.
Rgds
18 February 2014
yes TDS will be applicable.
Message likes :
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19 February 2014
Thank you for the reply. Can you tell me the rate of TDS applicable in this case.If a relative in India wants to transfer from SB a/c to an NRI in Canada whether TDS applicable ?If applicable the Rate of TDS also please inform
25 July 2024
In the scenario where a relative in India transfers funds from their Savings Bank (SB) account to an NRI in Canada, TDS (Tax Deducted at Source) may apply depending on the nature of the transaction. Here’s how it typically works:
1. **Applicability of TDS**:
- If the transfer from the SB account to the NRI in Canada is considered a remittance under the Income Tax Act, TDS may apply.
- Generally, TDS is applicable when funds are remitted outside India, subject to certain exemptions or lower withholding rates under Double Taxation Avoidance Agreements (DTAA) if applicable.
2. **Rate of TDS**:
- The applicable rate of TDS can vary depending on whether the recipient NRI qualifies for any exemptions or reduced rates under the DTAA between India and Canada.
- For remittances made to NRIs, the standard TDS rate under Section 195 of the Income Tax Act is 15% (plus applicable surcharge and cess). This rate may apply if no DTAA benefits are claimed.
3. **Double Taxation Avoidance Agreement (DTAA)**:
- India has a DTAA with Canada, which may provide for a lower rate of TDS on remittances, typically ranging from 10% to 15% depending on the type of income (such as interest, dividends, royalties, etc.).
- To avail the benefits of DTAA and apply a lower rate of TDS, the NRI recipient would need to provide a Tax Residency Certificate (TRC) from Canada and fulfill other conditions as per the DTAA.
### Conclusion:
- **TDS Applicability**: TDS may be applicable on the remittance from the SB account to the NRI in Canada.
- **Rate of TDS**: The standard rate under Section 195 is 15%, but this can be lower under the DTAA between India and Canada if the NRI provides the necessary documentation.
- **Consultation**: It’s advisable to consult with a tax advisor or a chartered accountant to determine the exact applicability of TDS and the applicable rate based on the specifics of the transaction and the DTAA provisions between India and Canada. They can provide personalized guidance based on your situation and ensure compliance with Indian tax regulations.
1. **Applicability of TDS**:
- If the transfer from the SB account to the NRI in Canada is considered a remittance under the Income Tax Act, TDS may apply.
- Generally, TDS is applicable when funds are remitted outside India, subject to certain exemptions or lower withholding rates under Double Taxation Avoidance Agreements (DTAA) if applicable.
2. **Rate of TDS**:
- The applicable rate of TDS can vary depending on whether the recipient NRI qualifies for any exemptions or reduced rates under the DTAA between India and Canada.
- For remittances made to NRIs, the standard TDS rate under Section 195 of the Income Tax Act is 15% (plus applicable surcharge and cess). This rate may apply if no DTAA benefits are claimed.
3. **Double Taxation Avoidance Agreement (DTAA)**:
- India has a DTAA with Canada, which may provide for a lower rate of TDS on remittances, typically ranging from 10% to 15% depending on the type of income (such as interest, dividends, royalties, etc.).
- To avail the benefits of DTAA and apply a lower rate of TDS, the NRI recipient would need to provide a Tax Residency Certificate (TRC) from Canada and fulfill other conditions as per the DTAA.
### Conclusion:
- **TDS Applicability**: TDS may be applicable on the remittance from the SB account to the NRI in Canada.
- **Rate of TDS**: The standard rate under Section 195 is 15%, but this can be lower under the DTAA between India and Canada if the NRI provides the necessary documentation.
- **Consultation**: It’s advisable to consult with a tax advisor or a chartered accountant to determine the exact applicability of TDS and the applicable rate based on the specifics of the transaction and the DTAA provisions between India and Canada. They can provide personalized guidance based on your situation and ensure compliance with Indian tax regulations.
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