What is Section 195 under Income Tax Act?
In this part of our TDS series, we will discuss the concept of Section 195 of the tax deduction, which is-
Section 195: TDS on Other Payments Made to NR (Individual) or Foreign Company
- Who is required to deduct TDS u/s 195?
Any person (resident or non-resident) who pays any sum other than salary to a non-resident is required to deduct tax under this section.
- What is the rate & time of tax deduction u/s 195?
The rate of tax deduction u/s 195 shall be either of the below rates whichever is beneficial to you :
- Specified in the Double Taxation Avoidance Agreements between India and the country of the payee.
- Specified in the Income Tax Act.
Further, if the payee doesn’t have a PAN then rate could be rate as per the law in force or 20% whichever is higher.
- No Requirement of TDS :
No such exemption is provided in this section.