Muralidharan (Self Employed) (1034 Points)
21 December 2010Dear Members
A private limited company from Chennai, India, wish to pay 2700 sterling pounds to a Law Firm (solicitors) based in UK for the professional services rendered by them. The law firm does not have any office or permanent establishment in India. They do not have PAN. Kindly advise whether TDS has to be deducted from the said payment. If TDS has to be deducted please inform what is the rate to be applied.
with regards
Muralidharan
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 21 December 2010
If there is no PAN details, then from 1st April 2010 TDS will be deduted at the rate of 20%.
Divya K S
(CA)
(289 Points)
Replied 21 December 2010
The rate to be used is 'As per Income Tax Act' or 'As per DTAA' whichever is beneficial to the assessee. The rate is 15% + 3% Education Cess = 15.45% as per Income Tax Act.
In case the deductee does not have PAN, then 20% must be deducted.
CA CHANDRA PRAKASH HASSANI
(CA)
(33 Points)
Replied 23 December 2010
No TDS is required to be deducted subject to the condition that the foreign company does not have a permanent establishment or a business connection in India, so you need to take a certificate regarding thiis and their residential status of U.K. . If these conditions not fulfilled the u need to deduct TDS The rate to be used is 'As per Income Tax Act' or 'As per DTAA' whichever is beneficial to the assessee. The rate is 15% + 3% Education Cess = 15.45% as per Income Tax Act.
In case the deductee does not have PAN, then 20% must be deducted.
CA CHANDRA PRAKASH HASSANI
(CA)
(33 Points)
Replied 23 December 2010
No TDS is required to be deducted subject to the condition that the foreign company does not have a permanent establishment or a business connection in India, so you need to take a certificate regarding thiis and their residential status of U.K. . If these conditions not fulfilled the u need to deduct TDS The rate to be used is 'As per Income Tax Act' or 'As per DTAA' whichever is beneficial to the assessee. The rate is 15% + 3% Education Cess = 15.45% as per Income Tax Act.
In case the deductee does not have PAN, then 20% must be deducted.
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