Tds on foreign remittance

This query is : Resolved

NIKHIL GUPTA (Querist)
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04 December 2013 We are working as limited co in India and had taken Service from China which falls under definition of Sec 194J. Now my query is what shall be rate of TDS when;
1. Chinese co is having no permanent establishment in India and as such can't furnish PAN.
2. India and China is having DTAA.

Nitin Bhuta

Nitin Bhuta (Expert)
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04 December 2013 20% rate will be applicable by reverse grossing up even if rate specified under DTA is less than 20%.

NIKHIL GUPTA

NIKHIL GUPTA (Querist)
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04 December 2013 Why DTAA shall not be applicable when Sec 90 says that DTA can be used as per benefit of assessee.

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Nitin Bhuta

Nitin Bhuta (Expert)
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04 December 2013 because due non availability of PAN Number rate of TDS has been specified as 20% if unquoted they will demand as shortfall by way of default notice while processing e tds return.

any member differing from my point of view please kindly enrich me to rectify my understanding of the law