19 May 2014
If i want to make payment of Rs.540000/- to professional who is non residents india means he is in USA whether can i deduct tds? if yes then how he is taking credit of such tds in filling of his return?
last year my client make payment to japan co Rs. 1 crore and deduct tds 10% and japan co. having NO indian PAN and after that we receive notice from TRACE for diff of 10% and also receive notice for Rs. 5000/- wrong PAN in return.
What I said is that having an Indian PAN or not doesn't determine TDS rate as availability of PAN is not the determinant factor for residential status.
If the PAN is not available, then TDS rate has to be 20% or higher. even here you need to check what is the rate under DTAA. If the rate is higher than 20%, then such higher rate shall apply.
If the PAN is available than rate under DTAA or the act, whichever is beneficial shall apply.