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

[Rahul Patel]

Dear Sir,

We have deducted & Deposited TDS 20 percent at the time of making foreign service payment but our TDS Return 27 Q 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

Dispute Over TDS Deduction Rate for Consulting Fees to Foreign Engineer Under Section 195; ITD Rejects 20%, Seeks 25% A query was raised regarding the deduction of Tax Deducted at Source (TDS) under Section 195 for consulting fees paid to a foreign engineer. The individual deducted and deposited TDS at 20%, but the Income Tax Department (ITD) rejected the TDS Return 27 Q, stating that TDS should be 25%. A Chartered Accountant responded, noting that several factors, such as the nature of payment and the country involved, need consideration. The payment is for consulting engineering services to the USA, with no PAN available, and clarification on the applicable TDS rate was sought.