TDS U/s 195 on payment to Foreign Engineer for Consulting Fees

[Asked by Guest]

Dear Sir,

Professional Consultancy Charges is payable to an Foreign Engineer Consultancy For Consulting Fees.

the consulting is not having PAN No.

Please guide applicable TDS rate as per DTAA & as per Income Tax act. on above payment.

Regards,

Rahul Patel

Dear Sir,

Please reply the query.

we have deducted & Deposited TDS 20 percent at the time of making foreign serivce payment but our TDS Return 27Q is not accepted by ITD.

as per ITD TDS will be applicable 25 percent

Please let me know is any Notification issued by ITD in this regard.

Kindly Reply.

Regards,

Rahul Patel

AI Summary

TDS on payments to foreign consultants: dispute over applicable withholding rate after tax department rejected the filed return.
Applicability of TDS under section 195 arises for payments to a foreign engineer consultancy for professional fees; withholding must follow domestic law and any applicable DTAA, considering payee residency, fee characterization, and PAN presence. The payer deducted tax at one rate but Form 27Q was rejected and the tax department indicated a higher withholding rate, prompting queries about departmental notifications, treaty relief, and procedural steps (withholding certificate, residency documentation, PAN) to rectify withholding and return compliance.