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Withholding tax

Target marketing on overseas social media or automated advertising platforms not taxable as ‘Royalty’

Income Tax - Target marketing on overseas social media or automated advertising platforms not taxable as ‘Royalty’ In a major relief to taxpayers availing online marketing services from social media platforms like Facebook, the Bangalore bench of Income Tax Appellate Tribunal (ITAT) recently ruled in the case of Urban Ladder Home Décor Soluti...

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Countrywise Withholding Tax rates as per IT Act vis a vis Tax Treaties/DTAA

Income Tax - Certain income of non-resident, inter-alia, dividend, interest, royalty or fees for technical services shall be taxable as per the rates prescribed under the Income-tax Act or as per the rates prescribed under the DTAAs, whichever is more beneficial to such non-resident. ...

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Countrywise Withholding tax rates / Chart as per DTAA

Income Tax - Country wise Withholding tax rate on Dividend (not being covered under Section 115-O), Interest, Royalty and Fee for Technical Services ...

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Detailed Analysis of Section 195 along with latest case laws

Income Tax - Any person responsible for paying to a non-resident, not being a company, or to a foreign company, shall deduct income-tax thereon at the rates in force is responsible to deduct tax u/s 195 of the act. Nature of Payment a) Any interest (not being interest referred to in section 194LB, 194LC and 194LD). b) Any […]...

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Application to AO in New Form 15E under Rule 29BA & Section 195

Income Tax - CBDT issued notification No. 18/2021-Income Tax, Dated: March 16, 2021 & inserted a New Rule Rule 29BA. The Rule would be effective from 1 April 2021....

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Additional Income-tax on distributed income by company for buy-back of unlisted shares

Income Tax - 20% Withholding Tax Rate on profits distributed by unlisted companies to shareholders through buy-back of shares Existing provisions of Section 2(22)(e) provide the definition of dividends for the purposes of the Income-tax Act. Section 115- O provides for levy of Dividend Distribution Tax(DDT) on the company at the time when company dist...

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Vodafone pays over USD 400 mn more to buy Essar's 33 per cent stake

Income Tax - Ending year-long battle, UK-based Vodafone has agreed to pay USD 400 million more to its Indian partner Essar for buying its 33 percent stake in the joint venture Vodafone-Essar. With this, Essar closed the deal to sell its 33 percent stake at USD 5.46 billion as against USD 5 billion decided earlier. ...

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After Vodafone verdict IT department will investigate more cross-border mergers involving Indian assets

Income Tax - The government will look into more cross-border mergers involving Indian assets, like the Vodafone-Hutchison deal, after the Bombay High Court on Wednesday rejected UK-based Vodafone's petition against the imposition of tax by authorities here....

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Reminder : Person receiving income subject to withholding tax is required to obtain Permanent Account Number (PAN)

Income Tax - The Finance (No.2) Act of 2009 introduced section 206AA under the Income Tax Act, 1961 (the ITA) to provide that any person who is entitled to receive any sum or income or amount, on which tax is to be withheld under the ITA shall furnish PAN to the person responsible for withholding of tax. In case PAN is not furnished, minimum withholdi...

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Replacement of dividend distribution tax with withholding tax to boost business

Income Tax - The cost of doing business in India could come down if the dividend distribution tax (DDT) levied on foreign shareholders is replaced with a withholding tax as under the current system, apex chamber Ficci has said. According to the chamber, foreign shareholders are unable to claim credit in the home country for DDT paid in India, resultin...

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No section 195 TDS on IT support services as same is not technical services

Hitachi Metglas (India) Pvt. Ltd. Vs DCIT (ITAT Delhi) - IT support services availed by assessee-Indian company from foreign companies were standard connectivity and networking services could not be termed as technical services within the meaning of Section 9(1)(vii) and therefore, assessee was not liable to deduct TDS on such expenditures....

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No TDS on Sale of Software by treating it as Royalty

Financial Software and Systems Private Limited Vs CIT (Madras High Court) - Financial Software and Systems Private Limited Vs CIT (Madras High Court) The question of law which is involved is with regard to whether the assessee was liable to deduct Tax at Source in respect of the Computer Software which was dealt with by them, procured from a Non-Resident and sold in the Ind...

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Liability to Tax deduction cannot be imposed from retrospective effect

McCANN Erickson (India) Pvt.Ltd. Vs ACIT (ITAT Delhi) - McCANN Erickson (India) Pvt.Ltd. Vs ACIT (ITAT Delhi) we find that the Ld.CIT(A) has relied upon the amendment in the statute. However, the Co-ordinate Bench of this Tribunal after having considered the amendment held in the case of Ashapura Minichem Ltd. vs ADIT 131 TTJ 291 that till 08.05.2010, ...

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No section 195 TDS on payments by Airport Authority to Federal Aviation for technical assistance & cooperation

Airports Authority of India Vs ITO (TDS) (ITAT Delhi) - Airports Authority of India Vs ITO(TDS) (ITAT Delhi) Conclusion: TDS under section 195 was not applicable on payments made by company to the Federal Aviation Administration, USA (FAA), for providing technical assistance to AAI by way of providing its personnel and meeting on ATFM requirements and as...

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Withholding Tax rate of 5% on payment of dividend to resident of Netherlands after applying MFN Clause

Concentrix Services Netherlands B.V. Vs ITO (TDS) (Delhi High Court) - Withholding tax rate of 5% is to be applied while making payment of dividend by Indian entity to its shareholder in Netherlands after applying the Most Favoured Nation (MFN) clause in the Tax Treaty between India and Netherlands....

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CBDT notifies New Form 15E and rule 29BA

Notification No. 18/2021-Income Tax/G.S.R. 194(E) - (16/03/2021) - CBDT vide notification No. 18/2021-Income Tax, Dated: March 16, 2021 inserted new rule 29BA. Application for grant of certificate for determination of appropriate proportion of sum (other than Salary), payable to non-resident, chargeable in case of the recipients and also released new FORM No. 15E &...

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S. 40(a)(i) Tax Withholding on ‘Other sum chargeable’ of non residents

F.No.500/39/2015 (US FT & TR-V) - (26/10/2016) - For the purpose of making disallowance of other sums chargeable under Section 40(a)(i) of the Income-tax Act, 1961, in the case of non-residents, the appropriate portion of the sum chargeable to tax under the Act, ie, income component therein shall form the basis of such disallowance....

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Relaxation from deduction of tax at higher rate U/s. 206AA

Notification No. 53/2016-Income Tax - (24/06/2016) - 37BC. Relaxation from deduction of tax at higher rate under section 206AA.– (1) In the case of a non-resident, not being a company, or a foreign company and not having PAN the provisions of section 206AA shall not apply in respect of payments in the nature of interest, royalty, fees for technical ...

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CBDT relaxes conditions for furnishing of Form 15CA & Form 15CB

Notification No. 93/2015 - Income Tax - (16/12/2015) - Notification No. 93/2015 - Income Tax G.S.R. 978(E) dated 16th December, 2015 A CA certificate in Form No. 15CB will be required to be furnished only in respect of such payments made to non-residents which are chargeable to tax and the amount of payment during the year exceeds Rs. 5 lakh. No Form 15...

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Recent Posts in "Withholding tax"

No section 195 TDS on IT support services as same is not technical services

Hitachi Metglas (India) Pvt. Ltd. Vs DCIT (ITAT Delhi)

IT support services availed by assessee-Indian company from foreign companies were standard connectivity and networking services could not be termed as technical services within the meaning of Section 9(1)(vii) and therefore, assessee was not liable to deduct TDS on such expenditures....

Read More

No TDS on Sale of Software by treating it as Royalty

Financial Software and Systems Private Limited Vs CIT (Madras High Court)

Financial Software and Systems Private Limited Vs CIT (Madras High Court) The question of law which is involved is with regard to whether the assessee was liable to deduct Tax at Source in respect of the Computer Software which was dealt with by them, procured from a Non-Resident and sold in the Indian Market. This […]...

Read More

Target marketing on overseas social media or automated advertising platforms not taxable as ‘Royalty’

Target marketing on overseas social media or automated advertising platforms not taxable as ‘Royalty’ In a major relief to taxpayers availing online marketing services from social media platforms like Facebook, the Bangalore bench of Income Tax Appellate Tribunal (ITAT) recently ruled in the case of Urban Ladder Home Décor Soluti...

Read More
Posted Under: Income Tax |

Liability to Tax deduction cannot be imposed from retrospective effect

McCANN Erickson (India) Pvt.Ltd. Vs ACIT (ITAT Delhi)

McCANN Erickson (India) Pvt.Ltd. Vs ACIT (ITAT Delhi) we find that the Ld.CIT(A) has relied upon the amendment in the statute. However, the Co-ordinate Bench of this Tribunal after having considered the amendment held in the case of Ashapura Minichem Ltd. vs ADIT 131 TTJ 291 that till 08.05.2010, “the prevailing legal position was that ...

Read More

Countrywise Withholding Tax rates as per IT Act vis a vis Tax Treaties/DTAA

Certain income of non-resident, inter-alia, dividend, interest, royalty or fees for technical services shall be taxable as per the rates prescribed under the Income-tax Act or as per the rates prescribed under the DTAAs, whichever is more beneficial to such non-resident. ...

Read More
Posted Under: Income Tax |

Countrywise Withholding tax rates / Chart as per DTAA

Country wise Withholding tax rate on Dividend (not being covered under Section 115-O), Interest, Royalty and Fee for Technical Services ...

Read More
Posted Under: Income Tax |

Detailed Analysis of Section 195 along with latest case laws

Any person responsible for paying to a non-resident, not being a company, or to a foreign company, shall deduct income-tax thereon at the rates in force is responsible to deduct tax u/s 195 of the act. Nature of Payment a) Any interest (not being interest referred to in section 194LB, 194LC and 194LD). b) Any […]...

Read More
Posted Under: Income Tax |

No section 195 TDS on payments by Airport Authority to Federal Aviation for technical assistance & cooperation

Airports Authority of India Vs ITO (TDS) (ITAT Delhi)

Airports Authority of India Vs ITO(TDS) (ITAT Delhi) Conclusion: TDS under section 195 was not applicable on payments made by company to the Federal Aviation Administration, USA (FAA), for providing technical assistance to AAI by way of providing its personnel and meeting on ATFM requirements and assisting AAI in connection with ATFM by d...

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Withholding Tax rate of 5% on payment of dividend to resident of Netherlands after applying MFN Clause

Concentrix Services Netherlands B.V. Vs ITO (TDS) (Delhi High Court)

Withholding tax rate of 5% is to be applied while making payment of dividend by Indian entity to its shareholder in Netherlands after applying the Most Favoured Nation (MFN) clause in the Tax Treaty between India and Netherlands....

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Section 195 TDS not deductible if Income not taxable in India

DCIT Vs Force Motors Ltd. (ITAT Pune)

DCIT Vs Force Motors Ltd. (ITAT Pune) During the First Appellate Proceedings before the Ld. CIT(Appeals), it was submitted by the assessee that payments were made to technical consultants from Japan, Germany and Italy. The assessee submitted that these consultants are not residents of India and further their stay in India was less than th...

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