Withholding tax subject to surcharge and education cess

[Guest]

This is with reference to withholding tax. The case is the royalty payment to Japan. We have DTA with japan. My question is whether withholding tax is subject to surcharge and education cess, if no then give the reference of the same.

[Surender Gupta]

Surcharge and Education Cess both are applicable to withholding tax.

[sunil jain]

In case DTA is applicable and the with-holding tax is as per the rates specified in the DTA there is no question of surcharge/cess

AI Summary

Withholding tax: conflict on whether surcharge and education cess apply when a double taxation agreement governs withholding rates. Question whether withholding tax on royalty payments to Japan is subject to surcharge and education cess, with two conflicting positions: one stating surcharge and education cess apply to withholding tax generally, and the other stating that where a Double Taxation Agreement governs and withholding is at treaty rates, surcharge and education cess do not apply.