TDS on AMC of Software

Dear Freinds,

I need some specifice answer in this question going to be mentioned. We had paid US$ 3500 towards AMC Charge for software maintaiance remitted in FC to Austrialia . There is no PE for the said party in India . We had booked as R&M-Computer in our books as expenses after applicable conversion rate.

Now my question is that

1. Wheather we should deduct TDS on this payment , if yes, on what rate will be applicable.

2. How it will be shows in our TDS return because the have no any PAN Number..

3.Party is not in a mood to allow deduction TDS from their payment and they have monopoly in their area and we have no option but take their service . If we bear TDS on this payment , then it will 20% or some other rate because the party have no PAN Number.

4. If we bear TDS on this payment after grossing up , can IT department allow this expesne in our company IT asessment.

This is urgent . kindly reply

Thanks

K.N.Bhagat

 

Replies (3)
/forum/query-regarding-tds-141274.asp
Originally posted by : Kashi Nath Bhagat


Dear Freinds,

I need some specifice answer in this question going to be mentioned. We had paid US$ 3500 towards AMC Charge for software maintaiance remitted in FC to Austrialia . There is no PE for the said party in India . We had booked as R&M-Computer in our books as expenses after applicable conversion rate.

Now my question is that

1. Wheather we should deduct TDS on this payment , if yes, on what rate will be applicable.

Yes the TDS should be deucted @ 10.5575% or 20% (if no PAN).

2. How it will be shows in our TDS return because the have no any PAN Number..

No problem if you deduct TDS @ 20%

3.Party is not in a mood to allow deduction TDS from their payment and they have monopoly in their area and we have no option but take their service . If we bear TDS on this payment , then it will 20% or some other rate because the party have no PAN Number.

Here you have to gross up the TDS and the rate then shal go to 25% .It is better if you  obtain PAN on behalf of foreign party at your expenses.

4. If we bear TDS on this payment after grossing up , can IT department allow this expesne in our company IT asessment.

Yes.


This is urgent . kindly reply

Thanks

K.N.Bhagat

 

Anuj

0-9810106211

Totally Agree with you Sir

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