15 CB TOPIC

1. Certificate of Chartered Accountant 2. As per Rule 37 BB of Income Tax.

What is rule 37BB ? The information under sub-section (6) of section 195 shall be furnished by the person responsible for making the payment to a non –resident, after obtaining certificate from accountant

SECTION 195 – 1.Any person paying to non-resident 2. Interest or any sum chargeable under provisions of this act 3.At the time of credit of the income to the a/c of payee or payment whichever is earlier 4.Deduct tax thereon at the rates in force 5.The person shall furnish information relating payment of any sum in such form and manner prescribed by board

To track taxable income of the Non-Resident

Requirements :

1.Invoice copy 2.Loan Agreement 3.Contract with the payee and other supporting documents, 4.Correspondence/ s, broachers etc. 5.In case of Reimbursement of Expenses, supporting invoices /voucher and other documentary proof 6. Any other document which may help in determining the nature of payment/ quantum of income.

 PE ( Permanent Establishment) Certificate PE ( Permanent Establishment) Certificate  TRC ( Tax Residency Certificate) TRC ( Tax Residency Certificate)

Which TDS Rate you will apply ? There is no any standard TDS rate for foreign payment.

TDS Rate is depends upon following factors :  Nature of payment  Availability of documents

SECTION- 206AA If PAN is not available of beneficiary party : TDS Rate will be : 1. As per Income Tax Act 2.Rates in force 3.At the rate 20 % HIGHER OF ABOVE

FLOW CHART Whether payment is taxable in India Yes No No TDS PAN Available ? No Highest Rate will applicable TRC Available Yes No Rate as per Income Tax Act

PE Certificate available ? Yes No 41.o2 % i.e. normal tax rate as per Income tax Act Yes Rate as per Income tax or DTAA whichever is beneficial A

By : Daivashala Pawar B.Com, CA-Final com)