SEC 195 OF THE IT ACT
This query is : Resolved
10 November 2007
IS THERE ANY LIABILITY TO PAY ANY INCOME TAX UNDER SEC.195 ON ACCOUNT OF THE PAYMENT TO A FOREIGN COMPANY AT GERMANY TOWARDS MAINTENANCE AND UPGRADATION FACILTIY OF THEIR SOFTWARE. THIS DOES NOT INVOLVE ANY SALE/PURCHASE. THIS IS JUST LIKE AN AMC SERVICE. IF SO WHAT IS RATE OF TAX. PL RESPOND
10 November 2007
PAYMENT OF OTHER SUM TO A NON DOMESTIC COMPANY UNDER SEC 195-RATE OF TAX- 41.2% IF PAYMENT SUBJECT TO TDS DOES NOT EXCEED RS. ONE CRORE .
IF IT EXCEEDS RS. ONE CRORE 42.23%
BUT THE ABOVE RATES OR RATES SPECIFIED UNDER AVOIDANCE OF DOUBLE TAXATION (ADT)AGREEMENT ENTERED BY OUR GOVT. WITH THAT COUNTRY WHICHEVER IS LOWER (UNDER SEC 90).
WITH GERMANY THERE IS SUCH ADT . RATE IS 10%
SO YOU ARE LIABLE TO DEDUCT TDS @ 10% PLUS SURCHARGE AND CESS.
R.V.RAO
IF IT EXCEEDS RS. ONE CRORE 42.23%
BUT THE ABOVE RATES OR RATES SPECIFIED UNDER AVOIDANCE OF DOUBLE TAXATION (ADT)AGREEMENT ENTERED BY OUR GOVT. WITH THAT COUNTRY WHICHEVER IS LOWER (UNDER SEC 90).
WITH GERMANY THERE IS SUCH ADT . RATE IS 10%
SO YOU ARE LIABLE TO DEDUCT TDS @ 10% PLUS SURCHARGE AND CESS.
R.V.RAO
10 November 2007
THANKS FOR THIS VITAL INFORMATION.I HAVE DOUBT ABOUT THE SURCHARGE IF IT IS 40% SURCHARGE APPLICABLE ONLY OLD RATE OF 2.5% STILL.
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