Opinion on Withholding Taxes


Section 195:

Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest or any other sum chargeable under the provisions of this act shall at the time of credit of such income to the account of payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income tax thereon at the rates in force

Exhaustive applicability:

This section is wider in scope than all the other TDS sections insofar as all payers are covered and there is also no threshold exemption.

DTAA:

The Bilateral & Multilateral agreements entered by two countries for avoidance of double taxation has many pros & cons. The main disadvantage here is to understand separate clauses/articles of such DTAA & to relate the same with the Tax convention models to analysis & conclude the TDS applicability on a particular transaction.

Opinion:

In order to overcome the above issues one has to obtain a detailed in depth analysis of the transaction with respect to classification & Applicability of Withholding taxes for avoiding future nuisances

Other Certifications - Form 15CA and 15CB

Form 15CA – It is a Declaration of Remitter and is used as a tool for collecting information in respect of payments which are chargeable to tax in the hands of recipient non-resident.
Form 15CB - It is the Tax Determination Certificate where the Issuer CA examines the remittance having regard to chargeability provisions under Section 5 and 9 of Income tax Act along with provisions of Double tax Avoidance Agreements with the Recipient’s Residence Country.

Our Services:

  • We Provide Opinion on the Withholding Taxes of a cross border transaction with detailed analysis of both under Indian Income Tax Act, 1961 & DTAA between the beneficiary country
  • We Provide the Certification of Form 15CB & Preparation/Filing of Form 15CA applicable for the Foreign Outward Remittance.