If Commission is paid to a person who is in UAE, then at what rate TDS to be deducted?
Thanks in advance:)
Ratan Deep Saxena
(Asstt Manager (Accounts & Finance))
(2998 Points)
Replied 07 December 2009
Here, we shall discuss the TDS implications of payments of other sums as per the Indian Income Tax Act.
ratan
regards,
Ratan Deep Saxena
(Asstt Manager (Accounts & Finance))
(2998 Points)
Replied 07 December 2009
Dear Deepika,
Plz click on the link below for further explanation.
/experts/experts_message_display.asp?group_id=243145
as far as rate is concerned tds should be deducted @ 10%.
regards,
ratan
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 07 December 2009
Any payment made to Non resident will attract section 195 of Income Tax Act, 1961. Please check rates mentioned there.
Satvir Singh
(Newly minted CA)
(1733 Points)
Replied 07 December 2009
it should be at the rate of a Non Resident.. I m not sure how much it is, but more than 10% for sure
Sunil
(Trader)
(2611 Points)
Replied 07 December 2009
First you check the DTAA between India and UAE and refer to Article 7. If the sum you are paying abroad is the business income of the non-resident, it can only be taxed in the country of residence of the non-resident. Usually payments to independent agent GCA or broker are of this nature. In this case, as income is not deemed to accrue in India (if you pay it directly abroad) there is no TDS provided the payee has no PE or fixed base in India. If there is a fixed base in India or a PE then you have to deduct at 30% for individual and 40% for other than domestic companies.
However, if your remittance contains any element of Fees for Technical Service or Independent Personal Services, you will have to refer to the relevant article of the DTAA for the rates. According to Income Tax India, the rate is 30% to individual and 40% to other than domestic Company payee. If the FTS is on an agreement approved or deemed approved by the Government / Industrial Policy in force, then the rate is 10% for both individual and other than domestic company. This is irrespective of whether there is a fixed base or PE in India or not. DTAA may specify
1) A higher or lower rate. In this case you apply what is most beneficial to the payee. If there is no PAN you deduct 20% if the beneficial rate is lower than 20%.
2) In case DTAA specifies that the source state cannot charge tax or it may impose condition of a fixed base in India or services to be rendered in India, then you do not have to deduct TDS provided you pay directly abroad.
You can also apply the exclusion clauses for PE or fixed base in India to determine whether the non resident has PE in India or not.
You will need to obtain 15CB from the CA who will refer to your agreement with agent to determine if there is any Managerial Service (FTS) involved. Usually dependent agents render Technical or Managerial Services as they act on your behalf in managerial capacity. Your CA will determine this from your agreement.
FYI,Circular 786 is withdrawn However, the Section 9 ammended in 2004 deems income to be accrued in India only on as much operation is carried out by non resident in India through PE. If there is no PE and no operation in India by non resident and he is an independent agent then you do not deduct tax. However, if there is a managerial or technical service offered by agent, as indicated above you have to deduct TDS.
HEMANT PUJARA
(CA IN PRACTICE)
(25 Points)
Replied 25 May 2010
IF INTEREST IS PAYABLE TO BANK OF BARODA UAE BRANCH AGAINST A LOAN RAISED IN USD, WHAT WILL BE THE RATE OF TDS?
CA kanhaiya kumar
(CA PASSED IN NOV.11 EXAM)
(197 Points)
Replied 18 June 2010
SIR
CAN U TELL ME THAT SEC.40 DISTRIBUTION OF PROFIT TO PARTNERS AS PER FINANCE ACT 2009
FIRST Rs.300000 150000 OR 90%
BALANCE BOOK PROFIT 60%
IS IT APLICABLE ON PROFFESSINAL FIRM OTHER THAN PROFFESSIONAL FIRM OR BOTH
PLEASE CLEAR IT ME
SIR
R Sai Kumar
(Article Assistant)
(25 Points)
Replied 22 August 2011
An indian company as entered into an aggrement with foreign unversity (USA) for providing different online course to indian students and remitting the amount of fee charged from the students to foreign unversity. My doubt is whether while course registration fee remitted to the foreign unversity is this indian company is liable to deduct tax at source.
R Sai Kumar
(Article Assistant)
(25 Points)
Replied 22 August 2011
An indian company as entered into an aggrement with foreign unversity (USA) for providing different online course to indian students and remitting the amount of fee charged from the students to foreign unversity. My doubt is whether while course registration fee remitted to the foreign unversity is this indian company is liable to deduct tax at source.
Rashmi Agarwal
(Audit Executive)
(36 Points)
Replied 12 November 2011
yes of course mr kumar,as the university is getting the reimbursement as a result of the services provided to the indian company and so the provisions of sec 195 applies.
SRINIVASS
(PRORIETOR)
(27 Points)
Replied 26 January 2012
PLEASE LET ME KNOW WHETHER ANY TDS IS REQUIRED TO BE DEDUCTED ON REMITTANCE IN EUROS TO BE MADE TO UK TOWARDS ADVERTISMENT CHARGES IN A PUBLICATION IN LONDON ?
IF TDS APPLICABLE THEN AT WHAT RATES ?