11 November 2010
Dear Friend, the TDS on Non resident is applicable u/s 195. As per section 5 the income of NR should have been either be received or deemed to be received in India or should be accrue or deemed to accrue in India for such income to be taxable in India.
As per section 9 the income of a resident by way of fees for service rendered would be treated as technical fees and will be deemed to accrue and arise in India, the income will be taxable in India with in the meaning of deeming provision under section 9 of the Act as the explanation 2 to section 9 (1) (vii)
However As per section 90 of IT Act one can take the benefit of provision of Double taxation Avoidance Agreements ( DTAA) Currently India has DTAA’s with more then 75 Countries.
Since in your query it is not clear that which country the non resident belongs to, in the absence of such information it is difficult to give any concrete advice, however from the language body of the query it seems that apparently TDS is applicable on line overhul under section 195 @ 10% if PAN is available. If no PAN the tax rate would be 20%.
CAclubindia
