How is TDS on fees for technical services paid to a non-resident taxed?

Question

tdsguru.in (CA firm) · Accepted Answer

Fees for technical services to a non-resident are taxed under Section 195 at the Act rate (commonly 20% plus surcharge and cess) or the lower DTAA rate, subject to TRC/Form 10F. Fees for technical services (FTS) paid to a non-resident are chargeable in India and attract TDS under Section 195. The domestic rate is commonly 20% (plus surcharge and cess), but a DTAA often caps FTS at a lower rate (frequently 10–15%). To apply the treaty rate, obtain the TRC, Form 10F and a no-PE declaration. The make-available test in many treaties can also determine whether a payment is FTS at all — a point worth checking before deducting.