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

AI Summary

Company's Foreign Payment Without TDS Faces Compliance Query; TRC or 25% Tax Suggested for Resolution A company made a foreign payment for consultancy fees to a non-resident company in the USA without deducting TDS, based on a Chartered Accountant's certificate and a declaration from the non-resident company stating no permanent establishment in India. The query concerns compliance with a new amendment requiring a Tax Residency Certificate (TRC) to benefit from the Double Taxation Avoidance Agreement (DTAA). The response suggests either obtaining the TRC for the relevant period or paying tax at a rate of 25% plus applicable surcharges and cess to address the short deduction issue.