TDS under DTAA

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

20 July 2011 Dear friends one of our client is involved in the services of venue hire services with foreign Sports Associations.
The problem is while making the foreign remittance TDS prov. applicable but i got to know from the DTAA TDS chart and DTAA book of SnowWhite Publisher latest addition that this service don't fall under the category of INTEREST,DIVIDEND OR TECHNICAL SERVICES.

And even there is no special provision for other services. So i dont know what to do.

SO pls reply me ur valued answer on sahu.bhagaban@gmail.com or confirm me on 09322100675.
Waiting 4 ur mail or call

Arihanth Jain

Arihanth Jain (Expert)
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21 July 2011 Firstly from your query I understand that your client (Indian resident) is paying hire charges to foreign sports associations for venue/premises hired from the later.

As per article-6-DTAA, If a person is a non-resident(NR) and derives income from an immovable property situated in India, such income shall be taxable in India regardless of such person being a NR in India. In short source rule prevails here.

Therefore if the property is situated abroad, your client can avail the above benefit & tds shall be nil

However if the property is situated in India then tds shall be applicable. DTAA at many places does not specify the rate to used for tds, it instead directs back to Income Tax Act. Hence in this case tds u/s 194E (payment to nonresident sportsmen or sports association) should be 10%.

Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2011 My client is a Indian resident and the deductee is from UK and rendering services in UK only.He is not rendering any service in India.We are just paying them their hire charges/remittance for serving us in UK.

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