Question – Residential status of a company – How should it be determined ? Answer – A company is said to be resident in India in any previous year, if : – it is an Indian company; or its Place of Effective Management (‘POEM’), in that year, is in India. Thus, an Indian Company would … Read more
Question – What is a Tax Residency Certificate (TRC) for Non Resident ? Answer – Tax residency certificate (TRC) is a certificate issued by tax authorities of a country , confirming that a given assessee is a tax resident of such country and is eligible for the benefit of Tax Treaties entered into by that … Read more
The following points shall be covered under this Article “Section 194J of Income Tax Act – TDS on Professional Fees/Technical Fees” : Section 194J of Income Tax Act, 1961 Timing of deduction of TDS Rate of TDS No deduction of Tax under section 194J of Income Tax Act TDS deduction by Individual/ HUF TDS on … Read more
Meaning of Passive Income In order to ascertain if a company has a Place of Effective Management in India, the Meaning of passive income is an important criterion. A company shall be said to be engaged in ‘Active Business Outside India’ if amongst other conditions, its passive income is 50% (or less) of its total … Read more
Place of Effective Management (POEM) – Meaning When we talk about the meaning of “Place of Effective Management , it is an internationally acceptable test to determine, whether a company incorporated in a foreign jurisdiction, is a tax resident of another country.” Place of effective management means a place where : – Key management, and … Read more
Who is required to make TDS payment ? TDS Online Payment – Under the provisions of Income Tax Act, 1961, various person, who could be individuals, HUF, partnership firm, LLP, company or other forms of assessee , are required to deduct TDS from payments, which may be made to various resident and non resident recipients … Read more
Section 194EE – Payment in respect of deposit under national savings scheme, etc. Key aspects to be considered for TDS under Section 194EE of the Income Tax Act are as under : – Issues Which Payor are liable to deduct tax under Section 194EE of Income Tax Act ? Who should be the Recipient . … Read more
Section 193 of Income Tax Act provides that the person responsible for paying to a resident, any income by way of interest on securities , shall at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque … Read more
TDS on professional charges is required to be deducted under Section 194J of Income Tax Act 1961. Rate and Amount for deduction of TDS The rate of TDS is as under : – TDS shall be deducted @ 10%. No Surcharge and Higher Education Cess (“HEC”) shall be added to the 10% rate. TDS @ 20% shall be deducted … Read more
Introduction – TDS on consultancy charges When a payment is made to a person for rendering a professional or technical service, etc., TDS on payment of availing of such services will be deducted under Section 194J of the Income Tax Act 1961. Let’s understand the concept of TDS to be deducted on consultancy charges in detail. … Read more