TDS on Royalty

[Asked by Guest]

As per amendment made in section 115A now in the case of non- resident taxpayer, where the total income includes any income by way of royalty and fees for technical services (FTS) received by such non- resident from govt. or any Indian company will deduct 10 % TDS instead of 25 %.

Sir my question :- Since non- resident don’t have PAN of Indian then section 206AA will be applicable so 20% TDS will be deduct. So as per my understanding, in any case 20% TDS will be deduct that means this provision is not so beneficial for NR.

AI Summary

TDS on royalty and FTS: PAN absence can trigger higher withholding, negating reduced non-resident rate benefit.
The amendment reduced the statutory withholding rate for royalty and fees for technical services payable to non-residents by government or Indian companies, but the PAN-related withholding rule requires higher TDS when a payee lacks an Indian PAN; in consequence payers may deduct at that higher PAN-linked rate and gross up amounts, nullifying the intended benefit of the reduced non-resident withholding rate.