Sir,

I want to know, a indian base company start a project at Zimbabwe and they hire a consultant at Zimbabwe. Now company want to pay professional fees to consultant to Zimbabwe from India. What tds rate is applicable the have not Pan & TRC and no DTTA.

Pls reply

Regards,

Pramod

Hii,

Any payment suppose to be made by Indian Resident to Non- resident attracts section 195 of Income Tax Act.

TDS rate- Relevant rate in force as per chapter XVIIB.  Incase payee not having valid PAN, then TDS rate  as per rate prescribed chapter XVIIB or 20% whichever is higher will apply. While calculating TDS rates we need to consider the provisions under Double Taxation Avoidance Agreement (DTAA) for the relevant country if any. In case payee fulfilling all the conditions as prescribed in the DTAA then rates as per DTAA will apply. Generally rates under DTAA will be lower than normal TDS rates. -

In aforesaid case, Payment for Professional Fees attracts Section 195 of Income Tax and 20% TDS will be deducted while making the payment as there is no DTAA Agreement and receiver does not hava any PAN Number.

Secondly, this service will be considered as Import of Service, so before making payment, Service receiver  has to pay 100% service Tax to government under reverse mechanism.There is no liability on service Provider to pay any service tax.

Thanks & Regards,

Neha Bansal

The payment should be made by deducting TDS at the rate of 20% because of the absence of PAN.