Withholding Tax Rate

[Ashwani Rustagi]

We are receiving services from Non Resident - USA (No PAN) both from corporate and non-corporate on regular basis and had been deducting TDS @ 21.012% including surcharge and cess till now.

I understand that recently, there has been change in rate of wiholding tax effective from June 01, 2013. Can some-one advise me what would be rate of tax now (including surcharge & cess) for both with or without PAN number of deductee.

Regards,

Ashwani Rustagi

 

[Anuj Gupta]

Ashwaniji,

 

The rate has been increased w.e.f 01.04.2013 and has now become 25.75% if the amount  payable is less than 1 crore.

Also if the foreign company or individuals are providing services ,physically in India, then you may need to deduct TDS at higher rate.

 

Anuj

AI Summary

Withholding tax rate change increases TDS obligations for nonresident service payments and for services performed in India. Withholding tax for payments to nonresidents for services increased effective April 1, 2013; the elevated withholding tax rate applies to payments to foreign corporate and non corporate recipients, including when the deductee has no PAN. Services physically performed in India may trigger deduction at an even higher rate. Withholders must assess place of performance and deductee status and include applicable surcharge and cess when calculating TDS.