Interest Payment to NRI
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 October 2010
Please tell me if an interest payment is made to a company based in Netherland what rate of TDS is requied to be deducted.
Further what will be the TDS amount if the amount is paid to a preference share holder
Further what will be the TDS amount if the amount is paid to a preference share holder
29 October 2010
TDS rate is 10% and in second leg of your qiestion do you mean the dividend payment to preference share holder or Interest payment to such share holder. If it is interest, the rate remains same.
Querist : Anonymous
Querist :
Anonymous
(Querist)
29 October 2010
sorry the same is preference share dividend. Further the party has no PAN
01 August 2024
For interest payments made to a company based in the Netherlands, you need to consider the tax provisions under the Double Taxation Avoidance Agreement (DTAA) between India and the Netherlands.
1. **Interest Payment to a Company in the Netherlands:**
- According to the DTAA between India and the Netherlands, interest payments to a non-resident company are generally subject to a maximum TDS rate of 10% on the gross amount of interest.
- If the company does not have a Permanent Account Number (PAN) in India, the TDS rate will be 40% under section 195 of the Income Tax Act.
2. **Preference Share Dividend Payment:**
- For dividends paid on preference shares, the TDS rate is typically 10% under section 115-O of the Income Tax Act.
- If the dividend is paid to a non-resident entity and they do not have a PAN, the TDS rate will be 40% under section 195.
In summary:
- **Interest Payment:** TDS rate will be 10% if the company has a PAN, or 40% if the company does not have a PAN.
- **Preference Share Dividend:** TDS rate will be 10% if the entity has a PAN, or 40% if it does not have a PAN.
Ensure to verify the specific provisions in the DTAA and consult a tax professional to confirm the applicable rates and compliance requirements.
1. **Interest Payment to a Company in the Netherlands:**
- According to the DTAA between India and the Netherlands, interest payments to a non-resident company are generally subject to a maximum TDS rate of 10% on the gross amount of interest.
- If the company does not have a Permanent Account Number (PAN) in India, the TDS rate will be 40% under section 195 of the Income Tax Act.
2. **Preference Share Dividend Payment:**
- For dividends paid on preference shares, the TDS rate is typically 10% under section 115-O of the Income Tax Act.
- If the dividend is paid to a non-resident entity and they do not have a PAN, the TDS rate will be 40% under section 195.
In summary:
- **Interest Payment:** TDS rate will be 10% if the company has a PAN, or 40% if the company does not have a PAN.
- **Preference Share Dividend:** TDS rate will be 10% if the entity has a PAN, or 40% if it does not have a PAN.
Ensure to verify the specific provisions in the DTAA and consult a tax professional to confirm the applicable rates and compliance requirements.
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