ULPI GUPTA (Manager Accounts and Finance) (32 Points)
22 February 2011Dear All!
PLease tell me whether we need to deduct TDS on export commission. Moreover please note that Export commissions are paid to persons who dont have PAN . Again the rate of TDS if applicable shall be hiked to 20%.
Please advise. Actually previously there wasa circular from Board that TDS is not applicable for export commission. However Board has withdrawn this circu;ar.
Can anyone help on this.
With Hope
Ulpi
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 22 February 2011
Hi,
Even though it is an export commission, one thing needs to be clear is to whom the commission is being paid. If the payee is resident in india, then TDS would be deducted under sec 194H and not under 195.
Further, even if the payment is made to the Non resident, then TDS would have to be deducted u/s195 @ 20% or the rate specified in DTAA agreement made with the payee's country where he is assesible to income tax. India has entered into DTAA agreements with no. of countries which specifies the rate of tax for various circumstances. TDS would be deducted at the rate as per Sec 195 i.e. 20% (for non pan holder) or rate in force as per DTAA whichever is lower.
So if DTAA rate is 10%, u need to deduct the TDS @ 10% and not as per 20% which is as per sec 195.
Hope This solves ur query.
Regards
Manoj B. Gavali
Y. S. Ghodvaidya
(Sr. Accounts Executive)
(67 Points)
Replied 24 February 2011
K. A Manoj B. Gavali Sir ,
Can You Please tell Me What is the DTAA Agreement
Tushar Sabharwal
(CA)
(21 Points)
Replied 07 April 2012
THE COMMISSION PAID TO NON RESIDENT IN (SRI LANKA) IS TAXABLE OR NOT .
CAN SOMEONE PLZ TELL ME.
EVEN IF THE CIRULAR NO.7/2209 HAS WITHDRAWN THE OTHER CIRCULAR BUT STILL THE ASSESSE DOES NOT HAVE PE IN INDIA.
ARTICLE 14 OF DTAA ALSO DENY FOR THE TAX ON SUCH PAYMENT UNLESS HE STAYED FOR 120 DAYS IN INDIA.
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