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Tds on payment to a foreign company

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)

25 April 2014

Experts/Friends

My Company has to make a payment to a company in Singapore towards using its technical know how.

If the DTAA rate between India and Singapore is 10%, will the withholding tax rate be 10% or be 20% as it does not have a PAN in India.

Regards,

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5 Replies

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 25 April 2014

Friends/Experts Looking forward to your opinion, views please. Thanks,

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CA Deepesh Ruhela (Keen to Learn) (3271 Points)
Replied 25 April 2014

Sir, TDS should be deducted @ 20% u/s195.

SAI SASANKA (CA) (108 Points)
Replied 26 April 2014

As per my view it should be at 25% according to sec 115A..If the company provides Tax residency certificate then the company can obtain benifit of DTAA otherwise tds deduction should b at 25%

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Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 29 April 2014

Thanks for your responses.

Now in the absence of PAN in India, regular Form 16A cannot be issued. The question is will the deductee be able to obtain credit of tax deduction at source @ 20% or 25% from its tax payable by way of filing of tax return in Singapore if the deductor Indian company gives a sort of declaration or certificate or statement about the deduction and deposit of tax in India.

Regards,