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tds on foreign payment

amarjeet singh (Student CA Final ) (105 Points)

02 February 2018

An Indian company has to pay professional fees to a company in usa. USA based company doesn't have any pe and pan card. We have asked them to provide trc. What's the rate of tds to be deducted?

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Rishi Mehta (Ur friend ) (1533 Points)
Replied 03 February 2018

Section 206AA any person entitled to receive any sum or income or amount, on which tax is deductible, shall furnish his PAN to the person responsible for deducting such tax, falling which tax shall be deducted at the higher of the following rates, namely;
(a) At the rate specified in the relevant provisions of this Act; or
(b) At the rate or rates in force; or
(c) At the rate of 20%. It is not applicable to section 194LC.

Also overrule provisions contained u/s 90 i.e. DTAA