Question ID : 40441

TDS

One of the Private Limited Company in India dealing in software services. One Foreign entity situated in USA is providing software services to the Indian Company. Foreign entity is not having any place of establishment in India and providing services from USA. Foreign entity will raise Bills for their services. Now the query is: 1.Whether the Indian Company has to deduct any TDS? At what percentage? 2.Whether there is any requirement of Form No.15CA and Form No.15CB? 3.Whether is there any requirement of Indian PAN for Foreign entity? 4.Any prior permission of Reserve Bank of India required?

The service referred to will fall within the meaning of fees for technical services as per Explanation 2 to clause (vii)of subsection (1) of Section 9. It is taxable at base rate of 10% plus sc plus cess as per sec 115A(1)(b). TDS to be deducted u/s 195 @ the above rate since the tax rateis already prescribed in the section