Gautam (Director) (33 Points)
18 June 2009Hi..
We need to pay to a Chinese company a fixed amount system set-up fees, so that they can set-up our account in their system and help us process the payments to be collected for our service exports.
They have no branches in India, or have any tie up. Do we have to deduct a TDS on the fees? If so, at what rate, and who do we issue the TDS certificate to ?
Thanks in anticipation for any advice...
VIVEK BARANWAL
(CA.)
(310 Points)
Replied 18 June 2009
| Originally posted by :Gautam | ||
| " |
Yes you have to deduct Tax @ of rate provided in Sec 195 or ADT agreement rate whichever is Lower for this regarding this you have to get a CA certificate and give a undertaking. I have attached the Format It may help you |
" |
Gautam
(Director)
(33 Points)
Replied 18 June 2009
Dear Vivek,
Thanks for this clarification and the attachment is indeed helpful.
Please help me understand one another thing - our business is considering appointing a franchisee in Hongkong - who will reimbursed on the costs incurred on our behalf and a markup. He would submit a mothly invoice, and we would have to remit that money to him. Would this payment also attract a TDS? That expense is my cost, so I would end up paying a tax on my cost, and then again on my profits again ? Or, is there a way to set off such TDS against my income taxes?
As always, a thanks in anticipation for any advice,
Best regards,
Anumanchipalli Sathikonda
(Tax Consultant)
(1349 Points)
Replied 18 June 2009
Mr. Goutham
Finace Act, 2008 has made an amendment to section 195 by incerting new sub-section (6). Amendment Rules and new Forms have also been notified. You may please refere the new rules and forms. I am herewith attaching a note.
Best Wishes
Sathikonda
Gautam
(Director)
(33 Points)
Replied 18 June 2009
Dear Sathikonda A,
Thanks for the advice. Very timely indeed.
Best regards,
Gautam
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