Rate of TDS

[madhavvan n]

One NRI Party has a NRO Account in Indis and has asked to remit their fees to NRO a/c in India and they are insisiting that TDS rate should be as per Indian income tax rates as specified in IT act and not as applicable for foreign payments pls let us know at what rate tds to be deducted

[Guest]

In case a party who is non resident in India is involved, you have see the provisions of TDS in the light of provisions of section 195 read with related to DTAA with that country entered into by the Government of India. But, where the transaction does not attract the provisions of section 195 or DTAA, normal provisions of TDS are applicable. This issue is not simple. You need to consult the appropriate person after showing the details of your agreement, terms and conditions and nature of payment.

AI Summary

TDS on non-resident payments: apply Section 195 and relevant DTAA; otherwise apply standard domestic TDS rules. Withholding for payments to a non-resident must be determined by reference to Section 195 read with any applicable Double Taxation Avoidance Agreement; if neither the section nor the treaty applies, the normal domestic TDS provisions govern, and determination requires review of the agreement, payment nature and residence facts.