TDS on Payment to Non-Residents

Yes TDS is to be deducted...

And i think its the case of accessing services, so accordingly the rate should apply, but not sure... About TDS, that has to be deducted

Hey rupesh..... I had similar query few days back....... whether TDS is applicable for membership subscripttion..... But no provision to deduct tax at source for this.... Sure yer......

Hi Ms. Priya,

Thanks a lot for going thru this..I think TDS is to be deducted u/s-195.Now I want to know the rate of deduction..and if deducted,then while filing the TDS return...what will be the PAN of the deductee??on what rate of exchange the tds is to be deducted and the rest amount to be paid to the party(remitting in USD),etc??

As per the definition of royalty for purposes of Section 195, providing information is also included in the definition. So, TDS need to be deducted @ withholding tax rates as per Section 195 or rates as per DTAA, whichever is less (beneficial to the assessee) treating it as royalty income.

As per DTAA between India & China, the rate of tax to be deducted at sources is 10% for royalty. As per rates prescribed u/s 195 of Income Tax Act, 1961, the rate is 10% for both company & non-company deductees.

Since, the rates are same, tax rate to be applied is 10%. Otherwise, rate whichever is less must be applied. In this case, 10% + education cess @ 3%, i.e., 10.3% must be used.

The PAN of the deductee must be quoted in the e-TDS returns by asking them only. If PAN is not quoted in ETDS returns, then tax must be deducted @ 20%.

On the date of certifying the payment in Form 15CB, the exchange rates can be used. This exchange rates can be used for both TDS deduction & remittance of balance amount.