{"id":3180,"date":"2019-12-16T18:13:42","date_gmt":"2019-12-16T12:43:42","guid":{"rendered":"https:\/\/aktassociates.com\/blog\/?p=3180"},"modified":"2021-12-24T11:43:23","modified_gmt":"2021-12-24T06:13:23","slug":"tds-on-nri-faq","status":"publish","type":"post","link":"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/","title":{"rendered":"Complete Guide Of TDS On Non Resident Indians (NRI) : FAQ&#8217;s"},"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<a href=\"https:\/\/aktassociates.com\/blog\/tds-section-194ia\/\"> 194A<\/a>, 194B, 194C, 194J, 194Ietc. In these sections, there\u2019s a section U\/s 195 which when payment is being made to any Non-Resident.<\/span><\/p>\n<p><a href=\"https:\/\/www.youtube.com\/watch?v=GX3CcrjvXRk\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-3595 size-full\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/Untitled-design-5.png\" alt=\"tds on property\" width=\"700\" height=\"400\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/Untitled-design-5.png 700w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/Untitled-design-5-300x171.png 300w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/Untitled-design-5-20x11.png 20w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\">In this article, we shall discuss the TDS on the payment made to Non-Resident.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The objective is to monitor and curd the tax evasions on the payment made to a <a href=\"https:\/\/aktassociates.com\/blog\/tax-compliance-for-nri\/\">non-resident<\/a>. <\/span><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 discusses on the Frequently Asked Questions (FAQ) made on deducting TDS on the payments made to Non-resident under <a href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/\">section 195<\/a> of the Income-tax act<\/span><span style=\"font-weight: 400;\">.<\/span><\/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-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q1_Meaning_of_Non-resident\" title=\"Q.1 Meaning of Non-resident?\">Q.1 Meaning of Non-resident?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q2_Who_shall_be_responsible_to_deduct_TDS_under_section195\" title=\"Q.2 Who shall be responsible to deduct TDS under section.195?\">Q.2 Who shall be responsible to deduct TDS under section.195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q3_Who_is_the_payee_under_section_195\" title=\"Q.3 Who is the payee under section 195?\">Q.3 Who is the payee under section 195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q4_what_kind_of_transactions_are_covered_under_sec195\" title=\"Q.4 what kind of transactions are covered under sec.195?\">Q.4 what kind of transactions are covered under sec.195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q5_If_the_above-specified_payments_are_not_covered_under_section_195_then_in_which_section_the_TDS_would_be_deducted_for_these_payments\" title=\"Q.5 If the above-specified payments are not covered under section 195 then in which section the TDS would be deducted for these payments?\">Q.5 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-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q6_What_is_the_time_limit_for_deducting_TDS_us_195\" title=\"Q.6 What is the time limit for deducting TDS u\/s 195?\">Q.6 What is the time limit for deducting TDS u\/s 195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q7_What_Would_be_the_Threshold_limit_for_deducting_of_TDS\" title=\"Q.7 What Would be the Threshold limit for deducting of TDS?\">Q.7 What Would be the Threshold limit for deducting of TDS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q8_At_what_rate_the_TDS_would_be_deducted_under_section195\" title=\"Q.8. At what rate the TDS would be deducted under section.195?\">Q.8. At what rate the TDS would be deducted under section.195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q9_Which_exchange_rate_shall_be_considered_for_TDS_on_non-resident\" title=\"Q.9 Which exchange rate shall be considered for TDS on non-resident?\">Q.9 Which exchange rate shall be considered for TDS on non-resident?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q_10_What_is_the_Double_Taxation_Avoidance_Agreement_DTAA\" title=\"Q. 10 What is the Double Taxation Avoidance Agreement (DTAA)?\">Q. 10 What is the Double Taxation Avoidance Agreement (DTAA)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q11_How_can_an_NRI_take_the_benefit_of_DTAA\" title=\"Q.11 How can an NRI take the benefit of DTAA?\">Q.11 How can an NRI take the benefit of DTAA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q12_What_is_Tax_residency_certificate_and_from_where_to_get_this\" title=\"Q.12 What is Tax residency certificate and from where to get this?\">Q.12 What is Tax residency certificate and from where to get this?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q13_What_kind_of_details_should_be_covered_in_TRC\" title=\"Q.13 What kind of details should be covered in TRC?\">Q.13 What kind of details should be covered in TRC?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q14_Procedure_for_the_deduction_of_TDS_us195\" title=\"Q.14 Procedure for the deduction of TDS u\/s.195?\">Q.14 Procedure for the deduction of TDS u\/s.195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q15_What_kinds_of_details_are_covered_in_form_15CB_certificate\" title=\"Q.15 What kinds of details are covered in form 15CB certificate?\">Q.15 What kinds of details are covered in form 15CB certificate?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q16_Can_an_NRI_eligible_for_taking_the_Nil_deduction_certificate\" title=\"Q.16 \u00a0Can an NRI eligible for taking the Nil deduction certificate?\">Q.16 \u00a0Can an NRI eligible for taking the Nil deduction certificate?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q17_For_how_many_transactions_the_nil_deductions_certificate_is_valid\" title=\"Q.17 \u00a0For how many transactions, the nil deductions certificate is valid?\">Q.17 \u00a0For how many transactions, the nil deductions certificate is valid?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q18_What_would_be_the_penalty_If_the_person_does_not_comply_with_section195\" title=\"Q.18 What would be the penalty If the person does not comply with section.195?\">Q.18 What would be the penalty If the person does not comply with section.195?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q19_Where_the_property_to_be_sold_is_being_owned_by_residents_and_an_NRI_jointly_then_what_will_be_the_provision_of_TDS\" title=\"Q.19 Where the property to be sold is being owned by residents and an NRI jointly, then what will be the provision of TDS?\">Q.19 Where the property to be sold is being owned by residents and an NRI jointly, then what will be the provision of TDS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q20_What_are_the_other_compliances_required_for_the_Buyer_who_has_applied_for_TAN_and_has_also_paid_the_number_of_TDS\" title=\"Q.20 What are the other compliances required for the Buyer who has applied for TAN and has also paid the number of TDS?\">Q.20 What are the other compliances required for the Buyer who has applied for TAN and has also paid the number of TDS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#Q22_When_the_TDS_liability_is_being_occurred_whether_it_is_to_be_paid_is_at_the_time_of_the_agreement_or_at_the_time_on_which_the_amount_of_advance_paid_without_an_agreement\" title=\"Q.22 When the TDS liability is being occurred whether it is to be paid is at the time of the agreement or at the time on which the amount of advance paid without an agreement?\">Q.22 When the TDS liability is being occurred whether it is to be paid is at the time of the agreement or at the time on which the amount of advance paid without an agreement?<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Q1_Meaning_of_Non-resident\"><\/span><b>Q.1 Meaning of Non-resident?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Ans: Section 6 of the income tax act, 1961 has specified the criteria to decide the residential status of the assessee. Although, if the assessee 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<h3><span class=\"ez-toc-section\" id=\"Q2_Who_shall_be_responsible_to_deduct_TDS_under_section195\"><\/span><b>Q.2 Who shall be responsible to deduct TDS under section.195?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Ans: As 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, <a href=\"https:\/\/aktassociates.com\/blog\/hindu-undivided-family-taxability-benefits\/\">HUF<\/a>, and Firm &amp; Body Corporate, etc. So as per this section, TDS is required to be deducted by <\/span><span style=\"font-weight: 400;\">all payers<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><a href=\"https:\/\/aktassociates.com\/nri-lower-tds-certificate-sale-of-property-in-india\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-3452 size-full\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/TDS-CERTIFICATE-1.jpg\" alt=\"TDS CERTIFICATE\" width=\"700\" height=\"150\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/TDS-CERTIFICATE-1.jpg 700w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/TDS-CERTIFICATE-1-300x64.jpg 300w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/TDS-CERTIFICATE-1-20x4.jpg 20w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q3_Who_is_the_payee_under_section_195\"><\/span><b>Q.3 Who is the payee under section 195?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Ans: Whether Individual or Corporate or any other status, all the payees are covered under this section. So making payment to any non-resident, other than any company, covered under payee only if they fall under the definition of nonresident status as per section 6 of the Income-tax Act, 1961.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q4_what_kind_of_transactions_are_covered_under_sec195\"><\/span><b>Q.4 what kind of transactions are covered under sec.195?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Ans: \u00a0Under this section, any interest amount (other than interest as per section 194LB or section 194LC or section 194LD) or\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Other than salary, all other sums shall be chargeable under this section.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Following are the payment in which TDS is not required to be deducted under section 195:<\/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\u00a0<\/span><\/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 for 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<h3><span class=\"ez-toc-section\" id=\"Q5_If_the_above-specified_payments_are_not_covered_under_section_195_then_in_which_section_the_TDS_would_be_deducted_for_these_payments\"><\/span><b>Q.5 If the above-specified payments are not covered under section 195 then in which section the TDS would be deducted for these payments?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Ans: As we discussed above, Section.195 totally excludes Salary and dividend payment. So, TDS shall be deducted u\/s.192 not under section.195, if any salary payment is made to any NRI.\u00a0 Also, Dividend is not taxable in the hands of recipient i.e. NRI because dividend distribution tax (DDT) is required to be paid by the company from whom the dividend is to be received.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q6_What_is_the_time_limit_for_deducting_TDS_us_195\"><\/span><b>Q.6 What is the <\/b><b>time limit for deducting TDS u\/s 195?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Ans: 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 <\/span><span style=\"font-weight: 400;\">handed<\/span><span style=\"font-weight: 400;\"> over to the buyer but the payment is yet to be made and accordingly the TDS will apply.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q7_What_Would_be_the_Threshold_limit_for_deducting_of_TDS\"><\/span><b>Q.7 What Would<\/b><b> be the Threshold limit for deducting of TDS?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> 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<h3><span class=\"ez-toc-section\" id=\"Q8_At_what_rate_the_TDS_would_be_deducted_under_section195\"><\/span><b>Q.8. At<\/b><b> what <\/b><b>rate the TDS would be deducted under section.195?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> There are different rates that have been specified as per the nature of the transactions. These rates have been defined in chapter XVIIB.\u00a0 However, if the payee i.e. If the NR<\/span><span style=\"font-weight: 400;\">I<\/span><span style=\"font-weight: 400;\"> does not contain a valid PAN, then TDS shall be deducted at @ 20% or any other rate as 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. Rates as per DTAA shall be applicable, in case N<\/span><span style=\"font-weight: 400;\">RI<\/span><span style=\"font-weight: 400;\"> is fulfilling all the prescribed conditions of DTAA then. Generally, rates under DTAA are lower than normal TDS rates.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q9_Which_exchange_rate_shall_be_considered_for_TDS_on_non-resident\"><\/span><b>Q.9 Which exchange rate shall be c<\/b><b>onsidered <\/b><b>for TDS on non-resident?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> The RBI exchange rate shall be taken on the day on which TDS is required to be deducted.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q_10_What_is_the_Double_Taxation_Avoidance_Agreement_DTAA\"><\/span><b>Q. 10 What is the Double Taxation Avoidance Agreement (DTAA)?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> Double Taxation Avoidance Agreement (DTAA) is an agreement established between the 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<h3><span class=\"ez-toc-section\" id=\"Q11_How_can_an_NRI_take_the_benefit_of_DTAA\"><\/span><b>Q.11 How can an NRI take the benefit of DTAA?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> The NRI 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><\/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<h3><span class=\"ez-toc-section\" id=\"Q12_What_is_Tax_residency_certificate_and_from_where_to_get_this\"><\/span><b>Q.12 What is Tax residency certificate and from where to get this?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> It is the certificate that has duly verified and issued by the Government of the country in which NRI 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 NRI.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q13_What_kind_of_details_should_be_covered_in_TRC\"><\/span><b>Q.13 What kind of details should be covered in TRC?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> A TRC should cover the following details<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\">Name of the assessee<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Status of the assessee (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 Tax 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<h3><span class=\"ez-toc-section\" id=\"Q14_Procedure_for_the_deduction_of_TDS_us195\"><\/span><b>Q.14 Procedure for the deduction of TDS u\/s.195?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> NRI needs to obtain 15CB form from a Chartered Accountant while making the payment to non-resident as per section.195(6) &amp; rule 37BB and needs to file the form 15CA ( undertaking by NRI) online at income tax website through their PAN login. Once<a href=\"https:\/\/aktassociates.com\/blog\/form-15ca-and-15cb\/\"> form 15CA<\/a> is prepared then NRI needs to take a print out of the form and sign and submit it along with Form 15CB to their banker\/AD to make the payment. On every remittance, NRI needs to follow the above procedure to remit the payment.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q15_What_kinds_of_details_are_covered_in_form_15CB_certificate\"><\/span><b>Q.15 What kinds of details are covered in form 15CB certificate?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> 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<h3><span class=\"ez-toc-section\" id=\"Q16_Can_an_NRI_eligible_for_taking_the_Nil_deduction_certificate\"><\/span><b>Q.16 \u00a0Can an NRI eligible for taking the Nil deduction certificate?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> Yes, as per section 195 (3) &amp; Rule 29B, an NRI may make the application to the department if he fulfills the following conditions<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\"> NRI has filed all his ITR due, as on the date of filing of an application.<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> He should not be in assessee 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<h3><span class=\"ez-toc-section\" id=\"Q17_For_how_many_transactions_the_nil_deductions_certificate_is_valid\"><\/span><b>Q.17 \u00a0For how many transactions, the nil deductions certificate is valid?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> Nil 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<h3><span class=\"ez-toc-section\" id=\"Q18_What_would_be_the_penalty_If_the_person_does_not_comply_with_section195\"><\/span><b>Q.18 What would be the penalty <\/b><b>If<\/b><b> the person does not comply with section.195?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans:<\/strong> If the buyer does not comply with the requirements of this section then following will be the consequences:<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\"> Such expenses 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 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<\/ol>\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<ol>\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<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"Q19_Where_the_property_to_be_sold_is_being_owned_by_residents_and_an_NRI_jointly_then_what_will_be_the_provision_of_TDS\"><\/span><b>Q.19 Where the property to be sold is being owned by residents and an NRI jointly, then what will be the provision of TDS?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">As we know that in case where the seller is resident then the TDS shall be deducted under section 194IA @ 1% on the sale value of consideration, in case the value exceeds Rs.50 Lakhs, however, in case the seller is being Non-Resident then the TDS shall be applicable at the rate as applicable under<a href=\"https:\/\/aktassociates.com\/blog\/tds-under-section-195\/\"> section 195<\/a> of Income-tax Act, 1961. For a resident, TDS shall be deducted at 1% and for NRI TDS shall be @ 20.8% of the value in the proportion of their holding. For example; a property that is equally and jointly owned by Mr. A (resident) and Mr. B (NRI) is to be sold at Rs 50 lakh rupees, TDS would be deducted @1% on Rs.0.5 lakhs for MR. A and @ 20.8% on Rs 10.40 lakhs for Mr. B.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q20_What_are_the_other_compliances_required_for_the_Buyer_who_has_applied_for_TAN_and_has_also_paid_the_number_of_TDS\"><\/span><b>Q.20 What are the other compliances required for the Buyer who has applied for TAN and has also paid the number of TDS?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Yes. The buyer will also have to <a href=\"https:\/\/aktassociates.com\/business-compliance\/tax-compliance\/tds-return-filing\">file the TDS return<\/a> within 30 days from the end of the particular quarter in which TDS payment is done. He has to file this before the due date to avoid the penalty for late filing of TDS return.<\/span><\/p>\n<p><a href=\"https:\/\/aktassociates.com\/nri-lower-tds-certificate-sale-of-property-in-india\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-3453 size-full\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/nri-tax-17500.jpg\" alt=\"nri tax\" width=\"700\" height=\"150\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/nri-tax-17500.jpg 700w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/nri-tax-17500-300x64.jpg 300w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2020\/01\/nri-tax-17500-20x4.jpg 20w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Q22_When_the_TDS_liability_is_being_occurred_whether_it_is_to_be_paid_is_at_the_time_of_the_agreement_or_at_the_time_on_which_the_amount_of_advance_paid_without_an_agreement\"><\/span><b>Q.22 When the TDS liability is being occurred whether it is to be paid is at the time of the agreement or at the time on which the amount of advance paid without an agreement?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong>Ans.<\/strong> TDS would have to be paid on or before the 7th working day of next month. It depends on whether the agreement is made or not. If the agreement has not been made than TDS would have to be deducted on the advance paid amount. If the agreement exists than TDS will be deducted on the entire amount of consideration.<\/span><\/p>\n<p><b>Q.23 What are the due dates for the filing of TDS return<\/b><\/p>\n<p><span style=\"font-weight: 400;\"><strong>Ans<\/strong>. Due dates for the filing of return is as follows:<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Quarter<\/b><\/td>\n<td><b>Period<\/b><\/td>\n<td><b>The due date for filing<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">1<\/span><span style=\"font-weight: 400;\">st<\/span><span style=\"font-weight: 400;\"> Quarter<\/span><\/td>\n<td><span style=\"font-weight: 400;\">01.04.2019 to 30.06.2019<\/span><\/td>\n<td><span style=\"font-weight: 400;\">31.07.2019<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">2<\/span><span style=\"font-weight: 400;\">nd<\/span><span style=\"font-weight: 400;\"> Quarter<\/span><\/td>\n<td><span style=\"font-weight: 400;\">01.07.2019 to 30.09.2019<\/span><\/td>\n<td><span style=\"font-weight: 400;\">31.10.2019<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">3<\/span><span style=\"font-weight: 400;\">rd<\/span><span style=\"font-weight: 400;\"> Quarter<\/span><\/td>\n<td><span style=\"font-weight: 400;\">01.10.2019 to 31.12.2019<\/span><\/td>\n<td><span style=\"font-weight: 400;\">31.01.2020<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">4<\/span><span style=\"font-weight: 400;\">th<\/span><span style=\"font-weight: 400;\"> Quarter<\/span><\/td>\n<td><span style=\"font-weight: 400;\">01.01.2020 to 31.03.2020<\/span><\/td>\n<td><span style=\"font-weight: 400;\">31.05.2020<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div><\/div>\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=\"Complete Guide Of TDS On Non Resident Indians (NRI) : FAQ&#8217;s\" class=\"read-more button\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/#more-3180\">Read more<span class=\"screen-reader-text\">Complete Guide Of TDS On Non Resident Indians (NRI) : FAQ&#8217;s<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":3181,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[107],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Complete Guide Of TDS On NRI : FAQ&#039;s AKT Associates<\/title>\n<meta name=\"description\" content=\"Meaning of Non-Resident Responsibility on the deduction of TDS under section 195 Transactions covered under this section Time limit and Rate for deduction Double Taxation Avoidance Agreement Tax Residency Agreement\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aktassociates.com\/blog\/tds-on-nri-faq\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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