Payment of consultancy fee to NRI
This query is : Resolved
06 February 2011
Hello all
One of our client wants to pay Technical Fees / consultancy fee to NRI as advise fee for software development. Should the person be kept as salaried employee or TDS should be deducted as per Income Tax Act to have minimum tax to the company as company will pay tax on behalf of NRI and also file return for NRI. NET amount that should come to NRI hands should be $1500.
TDS if amount paid to NRI under agreement if industrial policy is 10 %. But whether such type of arrangement falls under Industrial policy? If not then TDS shall be 30 %.
What shall be the best arrangement such that company as well as NRI is benefited?
One of our client wants to pay Technical Fees / consultancy fee to NRI as advise fee for software development. Should the person be kept as salaried employee or TDS should be deducted as per Income Tax Act to have minimum tax to the company as company will pay tax on behalf of NRI and also file return for NRI. NET amount that should come to NRI hands should be $1500.
TDS if amount paid to NRI under agreement if industrial policy is 10 %. But whether such type of arrangement falls under Industrial policy? If not then TDS shall be 30 %.
What shall be the best arrangement such that company as well as NRI is benefited?
08 February 2011
In the present case if the Company is ready to deal with the PF problems that have recently crept in after the issue of latest notification by the PF Department, then the salary option will be ideal.
Otherwise the Indian company can deduct 10.3% as TDS per Income TAx Act and later claim refund from the IT Dept.
Also the appointments shall be as per industrial policy hence the rate of TDS shall be 10.3% u/s 115A.
Otherwise the Indian company can deduct 10.3% as TDS per Income TAx Act and later claim refund from the IT Dept.
Also the appointments shall be as per industrial policy hence the rate of TDS shall be 10.3% u/s 115A.
08 February 2011
Payment is to be made to Non Resident Individual and not to Foreign Company as mentioned u/s 115A. What will be the treatment?
08 February 2011
kindly read the section 115A in detail,it covers non resident also .
115A. [(1) Where the total income of—
(a) a non-resident (not being a company) or of a foreign company,
includes any income by way of—
115A. [(1) Where the total income of—
(a) a non-resident (not being a company) or of a foreign company,
includes any income by way of—
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