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TDS on Foreign Payment

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✅  Consulatncy for TDS on Foreign Payment
✅  At what Rate TDS is Deducted
✅  Under Which Section TDS is Deducted
✅  TDS Certificate

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TDS on Foreign Payment

Section 195 of the Income Tax Act, 1961 deals with the deduction of Tax Deducted at Source (TDS) on foreign payments made by residents in India.
  • Applicability: TDS under Section 195 is applicable when a resident in India makes a payment to a non-resident or a foreign company, which is taxable in India.
  • TDS Rate: The TDS rate for foreign payments can vary depending on the nature of the payment and the relevant tax treaty, if any, between India and the country of the non-resident. The rates are specified in the Income Tax Act or the applicable tax treaty. It is essential to refer to the specific provisions and rates for accurate information
  • Prepare the TDS Return: The TDS return for Section 195 deductions is filed in Form 27Q. The form captures details such as the TAN of the deductor, PAN of the deductee (non-resident), transaction details, TDS deduction details, and other relevant information. Ensure that all the details are accurately filled in the form.
TDS Certificate: Once the TDS return is filed and processed, the deductor can download the TDS certificate, known as Form 16A, from the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal. The TDS certificate serves as proof of TDS deduction and can be provided to the deductee (non-resident) as well.