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TDS on Payment to Non Domestic Company

Mukund Patel (Student) (477 Points)

19 January 2010

Dear All,

I want to know about calculation of TDS and Service Tax on payment made to non domestic company by domestic company.

The case is as follows:

Payment made by domestic company to non domestic company of 10000/- USD for the purpose of professional or technical services.

Please help me out how to calculate TDS and Service Tax from the above mentioned details and also let me know which section is applicable for the same.

Thanking You,

MUKUND

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2 Replies

Deepak Goel (Partner) (54 Points)
Replied 19 January 2010

Dear Mukund,

As per section 9(1)(vii), any payment made by a resident to a non-resident for technical services, would be an income deemed to accrue and arise in India and is liable for withholding taxes. But be sure that the service for which payment is made is covered under the definition of taxable service. Also refer section 115A of the Income Tax Act and Article 12/13 of the relevant DTAA relating to fee for technical service. I think TDS rate would be 10.3% after the combined reading of all provisions

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