CA. Vipin Gupta (Accounts Officer) (146 Points)
31 December 2009we are making payment to italian technical consultants. I want to know the rate of TDS as prescribed by IT Act and also the rate as prescribed by DTAA. which rate is applicable ?
sivaprasad
(F & A)
(29 Points)
Replied 31 December 2009
as per ARTICLE NO.13 OF DTAA BETWEEN INDIA AND ITLAY tds rate is 10%
CA. Vipin Gupta
(Accounts Officer)
(146 Points)
Replied 31 December 2009
thanks a lot for your suggestion.
but what i found in DTAA, "the tax so charged shall no exceed 20 per cent of the gross amount.
please clarify is there any amendement in the act regarding the same
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 31 December 2009
Mr.Vipin Gupta and Mr.Siva Prasad
Please refer 115A of Income-tax Act. You will get clarification.
Best Wishes
Sathikonda
CA. Vipin Gupta
(Accounts Officer)
(146 Points)
Replied 31 December 2009
Mr. Sathikonda
Section 115A tells about the taxability of Non Resident or foreign company. it nothing suggests about rate of TDS
sivaprasad
(F & A)
(29 Points)
Replied 31 December 2009
as per the protocol in Jan/2006 amending the rate of dtaa between india and italy
sivaprasad
(F & A)
(29 Points)
Replied 31 December 2009
as per the protocol in Jan/2006 amending the rate of dtaa between india and italy tds rate is 10%.
This is 100% correct. No need to check any where.
Sivaprasad.
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 31 December 2009
Mr.Vipin Gupta
Section 195 casts an obligation on any person who is responsible for paying to a non-resident any interest, or any other sum chargeable under the provisions of income-tax act (not bieng income chargeable under the head salaries) to deuct income-tax from the amount payable to non-resident either at the time crediting such income to the account of non-resident or at the actual payment which ever is earlier. It is further clarified in the said section the tax is to be deducted at the rates in force.
Section 115A says that the income of the non-resident is taxable on presumptive basis at the rate of 10% on the fees for technical services disregarding the expenses incurred to earn the fees.
Hope you have got clarification now.
Best Wishes
Sathikonda
CA. Vipin Gupta
(Accounts Officer)
(146 Points)
Replied 01 January 2010
Thanks a Lot Mr. Sathikonda and Mr. Sivaprasad for your valuable suggestions. Now I am Clear.
CA. Vipin Gupta
(Accounts Officer)
(146 Points)
Replied 01 January 2010
I want to ask one more question whether there is any requirement of Certificate of Assesing officer. according to my knowledge it is required only when you want some lower rate. Not Mandatory. Please Help.
CA. Vipin Gupta
(Accounts Officer)
(146 Points)
Replied 01 January 2010
please also suggest me about the applicability of Surcharge and Education cess on this TDS and also the requirement of PAN of NON Resident Italian Consultant. HOw i fill TDS Return without PAN No. of Non Resident Italy Consultant
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 01 January 2010
Mr.Vipin Gupta
As per rule 37BB of Income-tax rules 1962 you have to furnish the information regarding the payment to non-resident to the income-tax department in Form No.15CA and before that you have to obtain a certificate from a chartered accountant in Form No.15CB.
Please refer section 195(6) and rule 37BB for more clarification.
As per the provisions of section 195(2) a person who is responsible to for paying any sum chargeble under income-tax act to the non-resident, can make an application to the assessing officer if he considers that the total amount paid is not chargeable to tax. The assessing officer on receiving the application will determine the taxable amount of the sum paid and issue a certificate accordingly. At present the jurisdiction is given to the international taxation wing of the department.
Best Wishes
Sathikonda
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 01 January 2010
Wish You All A Happy New Year
Sathikonda
CA. Vipin Gupta
(Accounts Officer)
(146 Points)
Replied 01 January 2010
Lot of Thanks Mr. Sathikonda for your valuable time and suggestion which are very useful for me.
Please resolve my remaining two issues also i will be thankful to you.
1. Filling of TDS return without having PAN No. of Italian Consultant
2. Surcharge and Education cess on TDS of Italian Consultant
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 06 January 2010
Mr.Vipin Gupta
In Form No.15CA , PAN of the deductee is a must. A foreign citizen or company can also obtain Indian PAN. I am herewith attaching a file containing the guide lines for obtaining a PAN by foreign citizens or companies. Regarding withholding Tax Rate please visit www.incometaxindia.gov.in or refer any direct taxes ready recknor.
Best Wishes
Sathikonda
CAclubindia
