| Question And Answer | |
|---|---|
| Subject: | How a Foreign Company will deposit TDS in India? |
| Category: | Income-Tax |
| Querist: | CA Shekhar Sharma |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Foreign company, Tax deduction at source |
| Date: | October 18, 2022 |
Fact of Case:
A foreign company (Germany) sold shares of an Indian company held by it to another foreign company (Germany).
Applicable Provisions:
- As per para 4 of Article 13 of DTAA between India & Germany “Gains from alienation of shares in a company which is a resident of the contracting state may be taxed in that state”.
- Section 9(1)(i) considers the income to accrue or arise in India if all income accruing or arising, whether directly or indirectly, through or from any business connection in India… or through the transfer of a capital asset situated in India.
- All other conditions mentioned in Section 47 are also met.
From the above-mentioned provisions we can conclude that the buying company is mandatory to deduct TDS while making the payment to the selling company.
Questions:
Q 1: How company a foreign company will deposit the deducted TDS in India?
Q 2: Does deductor of TDS (foreign company) is mandatory to have TAN & PAN to deposit TDS in India?
Q 3: Do both the foreign companies are mandatory to file ITR in India for the relevant FY?
Q 4: Applicable TDS rate will be 20% + Cess & Surcharge since no rate specifically given for TDS anywhere in the Act or Tax Treaty between two countries?
Q 5: Do deductee also required to apply for PAN in India?
Thanks in advance for the reply
ex abundanti cautela, it is advisable that, both the deductor and deductee procure a PAN & TAN and file their returns in India. The applicable withholding rate will be 20 percent plus Cess & Surcharge.
POST on LInkedin (:
https://www.linkedin.com/posts/venkataraman-swaminathan-8a9b9575_how-a-foreign-company-will-deposit-tds-in-activity-6992298815856795648-FFq3?utm_source=share&utm_medium=member_desktop
“Applicable Provisions:
As per para 4 of Article 13 of DTAA between India & Germany “Gains from alienation of shares in a company which is a resident of the contracting state may be taxed in that state”.
Section 9(1)(i) considers the income to accrue or arise in India if all income accruing or arising, whether directly or indirectly, through or from any business connection in India or THROUGH THE TRANSFER OF A CAPITAL ASSET SITUATED IN INDIA.
ALL OTHER CONDITIONS MENTIONED IN SECTION 47 ARE ALSO MET.
FROM THE ABOVE-MENTIONED PROVISIONS WE CAN CONCLUDE THAT THE BUYING COMPANY IS MANDATORY TO DEDUCT TDS while making the payment to the selling company.”
^FONT (Sporadic REactiON) Consider whether or not the underlying ‘ASSUMPTIONS’ make an inroad/ fly daringly in the TEETH OF THE SC Judgments time and again reiterating the correct legal position under the domestic law rtw the DTAA Implications ??!!?? ?
BaCk /OVER to >>>>
courtesy
“Answer given by Advocate Shashi Ashok Bekal
ex abundanti cautela, it is advisable that, both the deductor and deductee procure a PAN & TAN and file their returns in India. The applicable withholding rate will be 20 percent plus Cess & Surcharge.”
Suggest to review the Answer given in the light of/having due regard to the above posted COMMENT!
Addendum ( to traverse ab extra length) > https://www.linkedin.com/feed/update/urn:li:groupPost:118813-6991994890247122944?commentUrn=urn%3Ali%3Acomment%3A%28groupPost%3A118813-6991994890247122944%2C6992306460357525505%29