tda on foreign national

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 August 2010 what is the tds rate on artist fees paid to foreign national of usa who does not have establishment in india. please clarify

CA SMR

CA SMR (Expert)
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05 August 2010 Following requirements
1. TRC Certificate(Tax residency certificate-which shows that the vendor is the Tax Resident of the country he claims to belong to)
2. NPE (No Permanent Establishment Certificate-given by the vendor in their letter head. The validity period is also mentioned sometimes.)
3. Contract Copy or the extract of the payment detail portion and rate of Royalty, of the contract
4. Invoice

• The contract / nature of payment will determine the rate of TDS recovery. This may be as per Income tax Act or as per DTAA (Double Taxation Avoidance Agreement).First we check the applicability of DTAA. If the rate as per DTAA is more than IT Rate, then we deduct tax as per IT Rate. If there is no TRC, but the NPE is available, the rate of deduction will be as per the IT rate.
a. The rate and the can be determined from the web site link http://law.incometaxindia.gov.in/TaxmannDit/IntTax/WitholdingTax.aspx/and click on Withholding Tax followed by Withholding Tax Rates.
b. In order to know the rate as per income tax act, one can refer the website http://law.incometaxindia.gov.in/TaxmannDit/IntTax/nrcont.aspx, and click at Taxability of Non-Residents in India.
c. In order to know the clause/article under DTAA applicable, one can refer to the web site http://law.incometaxindia.gov.in/TaxmannDit/IntTax/Dtaa.aspx and click on the country to which the remittance will go.
• The Form 15 CB is filled up (2 copies) for Chartered
• In case of Royalty payment, MRR(2 copies) to be filled up as per the following checklist which has to be certified by the CA.
• Form 15 CA has to be filled up online at the website http://www.tin.nsdl.com