Question 1

What is Section 195 TDS rate for payments to non-residents?

Accepted Answer

Standard rates are 30% for professional/technical fees, 20% for interest/rent, and 10% for royalty. These can be reduced under DTAA (typically 10-15%) if recipient provides Tax Residency Certificate.

Question 2

When is Form 15CA and 15CB required?

Accepted Answer

Form 15CA is required for all foreign remittances. Form 15CB (CA certificate) is additionally required when payment exceeds Rs 5 lakh. Both must be filed before making the remittance.

Question 3

How does DTAA reduce TDS on foreign payments?

Accepted Answer

India has Double Taxation Avoidance Agreements with 90+ countries. If applicable, you can apply the lower DTAA rate instead of domestic rate. Recipient must provide Tax Residency Certificate to claim DTAA benefit.

Question 4

Can I get a Lower TDS Certificate for Section 195 payments?

Accepted Answer

Yes, under Section 197, the non-resident recipient can apply for a Lower/NIL TDS certificate if their actual tax liability is lower than the standard TDS rate.

Section 195 TDS on Foreign Payments

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