{"id":1597,"date":"2019-09-04T11:31:43","date_gmt":"2019-09-04T06:01:43","guid":{"rendered":"https:\/\/aktassociates.com\/blog\/?p=1597"},"modified":"2019-09-07T15:11:16","modified_gmt":"2019-09-07T09:41:16","slug":"tds-under-section-195","status":"publish","type":"post","link":"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/","title":{"rendered":"TDS under section 195"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Under the Income Tax Act, there are certain transactions have been specified under which TDS shall be deducted at the time of credit or payment as per the requirement of section. These sections includes 194A, 194B, 194C, 194J, 194I etc. In these sections, there\u2019s a section U\/s 195 which <\/span>when payment is being made to any Non-Resident. <span style=\"font-weight: 400;\">In this article, we shall discuss the TDS on the payment made to Non-Resident.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1603 aligncenter\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/TDS-under-section-195-Blog-image-07_09_2019-1.jpg\" alt=\"TDS under section 195\" width=\"700\" height=\"400\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/TDS-under-section-195-Blog-image-07_09_2019-1.jpg 700w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/TDS-under-section-195-Blog-image-07_09_2019-1-300x171.jpg 300w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/TDS-under-section-195-Blog-image-07_09_2019-1-20x11.jpg 20w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >In this article, we will discuss about...<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #1e73be;color:#1e73be\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #1e73be;color:#1e73be\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#Objective\" title=\"Objective:-\">Objective:-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#Meaning_of_Non-resident\" title=\"Meaning of Non-resident?\">Meaning of Non-resident?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#Who_shall_be_responsible_to_deduct_TDS_under_section195\" title=\"Who shall be responsible to deduct TDS under section.195?\">Who shall be responsible to deduct TDS under section.195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#Who_is_the_payee_under_section_195\" title=\"Who is the payee under section 195?\">Who is the payee under section 195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#what_kind_of_transactions_are_covered_under_sec195\" title=\"what kind of transactions are covered under sec.195?\">what kind of transactions are covered under sec.195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#If_the_above-specified_payments_are_not_covered_under_section_195_then_in_which_section_the_TDS_would_be_deducted_for_these_payments\" title=\"If the above-specified payments are not covered under section 195 then in which section the TDS would be deducted for these payments?\">If the above-specified payments are not covered under section 195 then in which section the TDS would be deducted for these payments?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#What_is_the_time_for_deduction_of_TDS\" title=\"What is the time for deduction of TDS?\">What is the time for deduction of TDS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#What_is_the_threshold_limit_for_deduction_of_TDS\" title=\"What is the threshold limit for deduction of TDS?\">What is the threshold limit for deduction of TDS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#At_which_rate_TDS_would_be_deducted_under_section195\" title=\"At which rate TDS would be deducted under section.195?\">At which rate TDS would be deducted under section.195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#Which_exchange_rate_shall_be_considered_for_TDS_on_non-resident\" title=\"Which exchange rate shall be considered for TDS on non-resident?\">Which exchange rate shall be considered for TDS on non-resident?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#What_is_the_Double_Taxation_Avoidance_Agreement_DTAA\" title=\"What is the Double Taxation Avoidance Agreement (DTAA)?\">What is the Double Taxation Avoidance Agreement (DTAA)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#How_can_an_NR_take_the_benefit_of_DTAA\" title=\"How can an NR take the benefit of DTAA?\">How can an NR take the benefit of DTAA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#What_is_Tax_residency_certificate_and_from_where_to_get_this\" title=\"What is Tax residency certificate and from where to get this?\">What is Tax residency certificate and from where to get this?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#What_kind_of_details_should_be_covered_in_TRC\" title=\"What kind of details should be covered in TRC?\">What kind of details should be covered in TRC?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#Procedure_for_the_deduction_of_TDS_us195\" title=\"Procedure for the deduction of TDS u\/s.195?\">Procedure for the deduction of TDS u\/s.195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#What_kinds_of_details_are_covered_in_the_form_15CB_certificate\" title=\"What kinds of details are covered in the form 15CB certificate?\">What kinds of details are covered in the form 15CB certificate?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#Can_an_NR_eligible_for_taking_the_Nil_deduction_certificate\" title=\"Can an NR eligible for taking the Nil deduction certificate?\">Can an NR eligible for taking the Nil deduction certificate?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#For_how_many_transactions_the_nil_deductions_certificate_is_valid\" title=\"For how many transactions, the nil deductions certificate is valid?\">For how many transactions, the nil deductions certificate is valid?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#What_would_be_the_penalty_of_the_person_does_not_comply_with_section195\" title=\"What would be the penalty of the person does not comply with section.195?\">What would be the penalty of the person does not comply with section.195?<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Objective\"><\/span><b>Objective:-<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The objective to charge the TDS on the payment to non-resident is <\/span>to control the transaction<span style=\"font-weight: 400;\">. Since once the payment has been credited to the non-resident then it would be very hard for the government to collect the tax amount from such non-resident due to geographical boundaries. Hence, the burden to collect and deposit the tax has been transferred to the resident buyer.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This article shall be discussed in Frequently Asked Questions (FAQ) mode on TDS on Non-resident payments under section 195 of the Income-tax act.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Meaning_of_Non-resident\"><\/span><b>Meaning of Non-resident?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">\u00a0Section 6 of the income tax act, 1961 has specified the criteria to decide the residential status of the <\/span><span style=\"font-weight: 400;\">assessee<\/span><span style=\"font-weight: 400;\">. Although, if the <\/span><span style=\"font-weight: 400;\">assessee<\/span><span style=\"font-weight: 400;\"> stays more <\/span><span style=\"font-weight: 400;\">than <\/span><span style=\"font-weight: 400;\">182 days in India in the relevant previous year, then he shall be resident otherwise he shall be called Non-Resident.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Who_shall_be_responsible_to_deduct_TDS_under_section195\"><\/span><span style=\"font-weight: 400;\"><strong>Who shall be responsible to deduct TDS under section.195?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">\u00a0As per section 195, irrespective of their status, all the <\/span><span style=\"font-weight: 400;\">taxpayers<\/span><span style=\"font-weight: 400;\"> are covered like Individual, HUF, and Firm &amp; Body Corporate, etc. So all the persons, who are payers, are responsible to deduct TDS under this section.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Who_is_the_payee_under_section_195\"><\/span><strong>Who is the payee under section 195?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">\u00a0Under this section, all the payees are covered whether Individual or Corporate or any other status. So making payment to any nonresident, other than any company, covered under payee only if they fall under the definition of non-resident status as per section 6 of the Income-tax Act, 1961.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"what_kind_of_transactions_are_covered_under_sec195\"><\/span><strong>what kind of transactions are covered under sec.195?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> \u00a0Under this section, any interest amount (other than interest as per section 194LB or section 194LC or section 194LD) or any<\/span><span style=\"font-weight: 400;\">\u00a0other sum chargeable under the provisions of this Act (not being income chargeable under the head \u201cSalaries\u201d).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So the following payment not required TDS deduction under this section<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\"> Interest under sections 195LB\/LC\/LD<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Payment of Salary <\/span>(because already covered u\/s 192)<\/li>\n<li><span style=\"font-weight: 400;\">Payment of Dividend u\/s 115-O<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">i.e. except the above-specified payments, all other payments are covered under this section. However, if payment made against any import then it would not be covered under the purview of TDS.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"If_the_above-specified_payments_are_not_covered_under_section_195_then_in_which_section_the_TDS_would_be_deducted_for_these_payments\"><\/span><strong>If the above-specified payments are not covered under section 195 then in which section the TDS would be deducted for these payments?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">\u00a0As we discussed above, Section.195 totally excludes Salary and dividend payment. Hence if any salary payment is made to any NR then TDS shall be deducted u\/s.192 not under section.195.\u00a0 Also, Dividend is not taxable in the hands of recipient i.e. NR because dividend distribution tax (DDT) is required to be paid by the company from whom the dividend is to be received.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_the_time_for_deduction_of_TDS\"><\/span><strong>What is the time for deduction of TDS?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">TDS is required to be deducted at the time of credit or payment whichever is earlier. Time of credit means the time when the property is being handed over to the buyer but the payment is yet to be made and accordingly the TDS will apply.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_the_threshold_limit_for_deduction_of_TDS\"><\/span><strong>What is the threshold limit for deduction of TDS?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Under this section, no threshold limit has been prescribed, TDS would be deducted on the entire amount of consideration without any threshold limit.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"At_which_rate_TDS_would_be_deducted_under_section195\"><\/span><strong>At which rate TDS would be deducted under section.195?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There are different rates has been specified as per the nature of the transactions. These rates have been defined in chapter XVIIB.\u00a0 However if payee i.e. NR does not have a valid PAN, then TDS @ 20% or as per rate prescribed chapter XVIIB whichever is higher shall be applicable.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When we are calculating TDS rates, we should consider the provisions of the Double Taxation Avoidance Agreement (DTAA) of the relevant country if any. In case NR is fulfilling all the prescribed conditions of DTAA then rates as per DTAA shall be applicable. Normally, rates under DTAA are lower than normal TDS rates.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Which_exchange_rate_shall_be_considered_for_TDS_on_non-resident\"><\/span><strong>Which exchange rate shall be considered for TDS on non-resident?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The RBI exchange rate shall be taken on the day on which TDS is required to be deducted.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_the_Double_Taxation_Avoidance_Agreement_DTAA\"><\/span><strong>What is the Double Taxation Avoidance Agreement (DTAA)?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Ans: Double Taxation Avoidance Agreement (DTAA) is an agreement established between two countries with the objective to avoid taxation on the same income in 2 countries. Currently, India has multiple DTAAs with more than 80 countries.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_can_an_NR_take_the_benefit_of_DTAA\"><\/span><strong>How can an NR take the benefit of DTAA?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The NR is required to submit the following documents with the payer to avail the TDS rates as specified under DTAA<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\"> Tax Residency Certificate (TRC)<\/span>(the most important document)<\/li>\n<li><span style=\"font-weight: 400;\"> PAN card copy<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Self-declaration<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Passport copy &amp; visa copy (if any)<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">If the NRI has regular transactions with the payer then these documents are required to submit on an annual basis.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_Tax_residency_certificate_and_from_where_to_get_this\"><\/span><strong>What is Tax residency certificate and from where to get this?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">It is the certificate which has duly verified and issued by the Government of the country in which NR claims to be a resident for the purpose of tax.\u00a0 This can be obtained from the Government or Tax authorities of that particular country of NR.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_kind_of_details_should_be_covered_in_TRC\"><\/span><strong>What kind of details should be covered in TRC?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A TRC should cover the following details<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\">Name of the <\/span><span style=\"font-weight: 400;\">assessee<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Status of the <\/span><span style=\"font-weight: 400;\">assessee <\/span><span style=\"font-weight: 400;\">(Individual, Firm, Company, Etc.)<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Country of origin<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Assessee <\/span><span style=\"font-weight: 400;\">\u00a0Tax Identification or Unique Identification number of the relevant Country<\/span><\/li>\n<li><span style=\"font-weight: 400;\"><a href=\"https:\/\/aktassociates.com\/blog\/nri-status-taxation\/\">Residential status<\/a> for the purpose of tax<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Validity Period of the certificate<\/span><\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"Procedure_for_the_deduction_of_TDS_us195\"><\/span><b>Procedure for the deduction of TDS u\/s.195?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Ans: <\/span><span style=\"font-weight: 400;\">The Resident Payer<\/span><span style=\"font-weight: 400;\"> needs to obtain <\/span><b>15CB**<\/b><span style=\"font-weight: 400;\"> form<\/span><span style=\"font-weight: 400;\">(except in exceptional payments)<\/span><span style=\"font-weight: 400;\"> from a Chartered Accountant while making the payment to<\/span><span style=\"font-weight: 400;\"> Non-resident<\/span><span style=\"font-weight: 400;\"> as per section.195(6) &amp; rule 37BB and needs to file the form <\/span><b>15CA*<\/b><span style=\"font-weight: 400;\"> ( undertaking by NR) online at income tax website through their PAN login. Once form 15CA is prepared then <\/span><span style=\"font-weight: 400;\">Resident Payer <\/span><span style=\"font-weight: 400;\">needs to take a print out of the form and sign and submit it along with <a href=\"https:\/\/aktassociates.com\/blog\/form-15ca-and-15cb\/\">Form 15CB<\/a> to their banker\/AD to make the payment. On every remittance, <\/span><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">The Resident Payer <\/span><span style=\"font-weight: 400;\">need to follow the above procedure to remit the payment.<\/span><\/p>\n<p><b>*<\/b> <b>15CA:- It is required only if the payment to NR is below 5,00,000, then only part A of 15CA is required to be issued.\u00a0\u00a0<\/b><\/p>\n<p><b>**15CB:-It is required when the payment to NR exceeds 5,00,000, then the following documents required to be filed:-<\/b><\/p>\n<ul>\n<li>part B of Form 15CA<\/li>\n<li>Part C of <a href=\"https:\/\/aktassociates.com\/blog\/form-15ca-and-15cb\/\">Form 15CA<\/a> and,<\/li>\n<li>Certificate from Chartered Accountant in form 15CB<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"What_kinds_of_details_are_covered_in_the_form_15CB_certificate\"><\/span><b>What kinds of details are covered in the form 15CB certificate?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The following details need to be submitted to a CA for form 15 CB:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Agreement and Invoices copy;<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Details of Payment<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Technical Advice\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In the case of Group Company transactions, Proof of rendering of services.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">E-mails, Remitting bank details, Rate of conversion of foreign currency and other general information.<\/span><\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"Can_an_NR_eligible_for_taking_the_Nil_deduction_certificate\"><\/span><b>Can an NR eligible for taking the Nil deduction certificate?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Yes, as per section 195 (3) &amp; Rule 29B, an NR may make the application to the department if he fulfills the following conditions<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\"> NR has filed all his ITR due, as on date of filing of the application.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> He should not be in assesse in default\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> He should not be liable for the penalty u\/s.271(1)(iii)<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> If he is Carrying a business in India for continuously at least 5 years and the value of the fixed assets in India exceeds Rs.50 Lakhs.<\/span><\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"For_how_many_transactions_the_nil_deductions_certificate_is_valid\"><\/span><b>For how many transactions, the nil deductions certificate is valid?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">\u00a0Nil deduction certificate issued under section 195 (3) shall remain valid up to the expiry of the certificate or it has canceled by the A. O whichever is earlier.<\/span><\/p>\n<p><a href=\"https:\/\/aktassociates.com\/business-compliance\/tax-compliance\/tds-return-filing\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1602 aligncenter\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/TDS-return-filing-Banner-image-07_09_2019-1.png\" alt=\"TDS return filing \" width=\"700\" height=\"150\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/TDS-return-filing-Banner-image-07_09_2019-1.png 700w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/TDS-return-filing-Banner-image-07_09_2019-1-300x64.png 300w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/TDS-return-filing-Banner-image-07_09_2019-1-20x4.png 20w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_would_be_the_penalty_of_the_person_does_not_comply_with_section195\"><\/span><b>What would be the penalty of the person does not comply with section.195?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If the buyer does not comply with the requirements of this section then following will be the consequences:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"> Such <\/span><span style=\"font-weight: 400;\">expenses<\/span><span style=\"font-weight: 400;\"> shall be disallowed u\/s 40a(i).<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> If the TDS has been deducted but not paid within time 30 days from the end of the month in which TDS was deducted then interest @ 1.50% per month or part of the month shall be levied from the date of deduction to date of deposit (Sec.201 (1A))<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Also, in the above case, the penalty shall be levied which is equivalent to the TDS amount\u00a0 Sec.221<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\"> if TDS has short deducted or not deducted then interest shall be charged @ 1% per month or part of the months and Penalty equivalent to the difference between actual deductible and deducted amount Sec.271C shall be levied from the date in which it is required to be deducted to the date of actual deduction of TDS.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Under the Income Tax Act, there are certain transactions have been specified under which TDS shall be deducted at the &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"TDS under section 195\" class=\"read-more button\" href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/#more-1597\">Read more<span class=\"screen-reader-text\">TDS under section 195<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":1604,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized 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