Withholding tax

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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SC ruling: No TDS on payment of Royalty to Non resident

Income Tax - The Hon’ble Supreme Court on 2nd March 2021 in the case of Engineering Analysis Centre of Excellence Private Limited Vs CIT, put a rest to the contentious issue of tax on Payment by end users or tech companies in India to suppliers abroad on import of software as ‘Royalty’. Let’s understand what was the issue […]...

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Basics of Section 195 of Income Tax Act, 1961

Income Tax - To Whom does Section 195 applies? a) A resident Making Payment to Non-Resident and, b) A Non-Resident making payment to a Non-resident. As per Section 195, it says Any person responsible for paying to non-resident…any person not only includes Resident but also non-resident making payment to a non-resident...

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Form 15CA & 15CB- Things to be kept in mind

Income Tax - The new rules for preparation, filing/ issuing forms 15CA and 15CB are effective from 01st April’2016. With these new rules coming into effect significant changes have come into effect for furnishing forms 15CA & 15CB. Some of the key changes for furnishing form 15CA & 15CB that have come into effect from 01st April’2016 are: ...

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Interesting Cases for TDS u/s 195 – Foreign Remittance from India

Income Tax - Withholding taxes u/s 195 in respect of transactions with Non-Residents has always been a bone of contention between Assessee and tax authorities. Though liability for deduction of TDS is clear in respect of some transactions like royalties, fees for technical services, interest etc., ...

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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 penalty for deduction of TDS at Lower Rate under wrong section

Jitendra Sharma Vs JCIT (Intl Taxation) (ITAT Indore) - Jitendra Sharma Vs JCIT (Intl Taxation) (ITAT Indore) ITAT Indore held that no penalty under Section 271C to be levied for deduction of tax under Section 194IA @1% instead of Section 195 @ 20.6% on purchase of property from Non Resident. FULL TEXT OF THE ITAT JUDGEMENT The above captioned appeals fi...

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Section 195- Withholding Tax- Royalty- Levy of Surcharge & cess

M/s. Wipro Limited Vs Add. CIT (ITAT Bangalore) - M/s. Wipro Limited Vs ACIT (ITAT Bangalore) In this case relief was allowed by learned CIT (A) in respect of levy of surcharge and cess by directing the AO that surcharge and cess should be levied only in the cases where the non resident vendors are residents of countries with which DTAA allows with...

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No income tax on Revenue from IDC/Management /Referral Agreement under India-Singapore DTAA

Edenred Pte Ltd Vs DDIT (International Taxation) (ITAT Delhi) - The issue under consideration is whether income tax levied on revenue received from IDC agreement, management agreement, and referral agreement as per the India-Singapore DTAA?...

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Interest Income as ‘Beneficial owner’ cannot be taxed under Article 11(3)(c) of India-Mauritius Tax Treaty

DCIT Vs HSBC Bank (Mauritius) Ltd. (ITAT Mumbai) - The issue under consideration is whether as per India-Mauritius DTAA, Interest Income from Foreign Currency loan and Securities would be eligible to tax in India?...

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Non-compete fees paid to employee is part of salary & hence Not Taxable in India as per DTAA

The Director of Income-Tax Vs Sasken Communication Technologies Ltd. (Karnataka High Court) - The issue under consideration is whether the amount paid to the employees under the non-compete agreement is covered by the expression ‘salary/profits in lieu of salary’ or not? and If not then whether the TDS will be applicable or not?...

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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"

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

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....

Read More
Posted Under: Income Tax |

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 – Application by a person for a cer...

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SC ruling: No TDS on payment of Royalty to Non resident

The Hon’ble Supreme Court on 2nd March 2021 in the case of Engineering Analysis Centre of Excellence Private Limited Vs CIT, put a rest to the contentious issue of tax on Payment by end users or tech companies in India to suppliers abroad on import of software as ‘Royalty’. Let’s understand what was the issue […]...

Read More
Posted Under: Income Tax |

No penalty for deduction of TDS at Lower Rate under wrong section

Jitendra Sharma Vs JCIT (Intl Taxation) (ITAT Indore)

Jitendra Sharma Vs JCIT (Intl Taxation) (ITAT Indore) ITAT Indore held that no penalty under Section 271C to be levied for deduction of tax under Section 194IA @1% instead of Section 195 @ 20.6% on purchase of property from Non Resident. FULL TEXT OF THE ITAT JUDGEMENT The above captioned appeals filed at the instances […]...

Read More

Section 195- Withholding Tax- Royalty- Levy of Surcharge & cess

M/s. Wipro Limited Vs Add. CIT (ITAT Bangalore)

M/s. Wipro Limited Vs ACIT (ITAT Bangalore) In this case relief was allowed by learned CIT (A) in respect of levy of surcharge and cess by directing the AO that surcharge and cess should be levied only in the cases where the non resident vendors are residents of countries with which DTAA allows withholding rate […]...

Read More

No income tax on Revenue from IDC/Management /Referral Agreement under India-Singapore DTAA

Edenred Pte Ltd Vs DDIT (International Taxation) (ITAT Delhi)

The issue under consideration is whether income tax levied on revenue received from IDC agreement, management agreement, and referral agreement as per the India-Singapore DTAA?...

Read More

Interest Income as ‘Beneficial owner’ cannot be taxed under Article 11(3)(c) of India-Mauritius Tax Treaty

DCIT Vs HSBC Bank (Mauritius) Ltd. (ITAT Mumbai)

The issue under consideration is whether as per India-Mauritius DTAA, Interest Income from Foreign Currency loan and Securities would be eligible to tax in India?...

Read More

Basics of Section 195 of Income Tax Act, 1961

To Whom does Section 195 applies? a) A resident Making Payment to Non-Resident and, b) A Non-Resident making payment to a Non-resident. As per Section 195, it says Any person responsible for paying to non-resident…any person not only includes Resident but also non-resident making payment to a non-resident...

Read More
Posted Under: Income Tax |

Non-compete fees paid to employee is part of salary & hence Not Taxable in India as per DTAA

The Director of Income-Tax Vs Sasken Communication Technologies Ltd. (Karnataka High Court)

The issue under consideration is whether the amount paid to the employees under the non-compete agreement is covered by the expression ‘salary/profits in lieu of salary’ or not? and If not then whether the TDS will be applicable or not?...

Read More

DTAA overrides the Act, even if it is Inconsistent with the Act

DCIT Vs Bharath Fritz Werner Ltd. (ITAT Bangalore)

whether the assessee has to deduct tax at source at the rates prescribed in section 206AA in case the payees are unable to furnish their PANs, even if tax liability arises out of the treaty?...

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