TAX RESIDENCY CERTIFICATE

[PANKAJ GUPTA]

Dear Sir,

We (company) have made foreign payment for consultancy fees for market development in foreign to non resident company USA without deducting TDS (withholding tax) on the basis certificate taken from Chartered accountant in form no. 15 CB which was issued on the basis of declaration taken from non resident company that they have no PE in India and their profits are part of their business profit (under article 7 of USA DTAA).

As per new amendment in Income tax rules w.e.f. 01.04.2013, TRC is required to take advantage of DTAA.

In that case what will be for non deduction of TDS/ non deposit of tds without obtaining  TRC from non resident company, even we have taken undertaking and Form 15 CB.

I am awaiting for your reply.

Thanks & Regards

Pankaj Gupta

14/7 Mathura Road, Faridabad

​M-09212401641

[Guest]

The same should be considered as an short deduction. Either arrange the TRC for that period where or pay tax  at the rate of the rate of 25 percent + SC+CESS as applicable.

AI Summary

Tax Residency Certificate requirement: absent TRC, withholding treated as short deduction requiring tax payment or obtaining TRC. Absence of a Tax Residency Certificate for a non resident recipient claiming DTAA benefits renders the payer's non deduction a short deduction; the payer must either obtain the TRC for the relevant period or discharge domestic withholding tax obligations by paying tax at the applicable withholding rate plus surcharge and cess.