Form 15 CA urgent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2010 Whether payment to NON resident is liable for deduction in case payment is made for stall booking in foreign country???
Urgent
at what rate TDS will be deducted

Pankaj Jhawar

Pankaj Jhawar (Expert)
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10 June 2010 Which country??? Youhave to check the DTAA. If the money is paid to non resident for these types of servies provided outside india and payment is made in foreign curreny then TDS may not be applicable but recent change in the explanation is to be checked whether the same is covered under that or not.

Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2010 that is Germany

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Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2010 Germany, for the purpose of participation fees in exhibition

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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25 July 2024 When making payments to non-residents for stall bookings or participation fees in exhibitions held in foreign countries, the tax implications and requirements for TDS (Tax Deducted at Source) need careful consideration. Here are the key points to understand:

### Tax Deduction Requirements:

1. **Nature of Payment**: Payment made for stall bookings or participation fees in exhibitions to a non-resident falls under the category of "Fee for Technical Services" (FTS) or "Royalty" as per the Income Tax Act, 1961.

2. **TDS Applicability**: According to Indian tax laws, payments to non-residents for FTS or royalty are subject to TDS under Section 195 of the Income Tax Act, 1961.

3. **Rate of TDS**: The applicable rate of TDS depends on whether there is a Double Taxation Avoidance Agreement (DTAA) between India and the non-resident's country (in this case, Germany). DTAA rates usually specify lower rates of TDS compared to the standard rate under Indian tax laws.

- **DTAA Benefit**: If there is a DTAA between India and Germany, you can apply the TDS rate specified in the DTAA for fees for technical services or royalties. Typically, for such payments, DTAA rates range between 10% to 15% depending on the specific terms of the agreement.

- **No DTAA**: If there is no DTAA between India and Germany, the TDS rate applicable under Section 195 of the Income Tax Act is 20%.

### Compliance Steps:

- **Obtain Form 15CA and 15CB**: Before making the payment, obtain Form 15CA (Declaration by Remitter) and Form 15CB (Certificate of an Accountant) from a chartered accountant. Form 15CB certifies that the payment is chargeable to tax in India and the appropriate rate of TDS. Form 15CA is an online declaration of the remitter which is required to be submitted electronically.

- **TDS Deduction and Payment**: Deduct TDS at the applicable rate (as per DTAA or Section 195) while making the payment to the non-resident.

- **Filing and Reporting**: After deducting TDS, file the TDS return on Form 27Q with the Income Tax Department and provide the non-resident with a TDS certificate in Form 16A.

### Conclusion:

For stall bookings or participation fees in exhibitions paid to non-residents in Germany, TDS is applicable under Section 195 of the Income Tax Act. The exact rate of TDS will depend on whether there is a DTAA between India and Germany. It's crucial to comply with these requirements to avoid any penalties or legal issues related to non-compliance with Indian tax laws.

For precise and specific advice tailored to your situation, especially considering urgency, it's recommended to consult with a qualified chartered accountant or tax advisor who can provide guidance based on the latest tax regulations and DTAA provisions between India and Germany.