Withholding tax is also known as retention tax. When a tax payers withholds their tax under certain conditions such as rent, commission, payment of services, salaries, etc as per the guidelines established in the tax regime is known as what is withholding tax in India.
As per the Official laws:
“The provisions of Withholding Tax are in the nature of machinery provisions applicable to the payer of the income to enable easy collection and recovery of tax and are independent of the charging provisions which are applicable for the recipient of the company.”
We all know that NRIs have to pay TDS but we should also learn about the withholding tax rates of NRIs as well.
I will provide the Withholding tax rates payments to Non-Residents Indians Below:
| # | Heading | Rate |
| 1 | Interest |
20% |
| 2 | Dividends paid by Domestic Companies |
Nil |
| 3 | Royalties |
10% |
| 4 | Technical Services |
10% |
| 5 | Any other services: Individuals |
30% of income |
| 6 | Any other services: Companies |
40% of the net income |
Withholding tax and TDS are basically the same thing. Under certain conditions, the tax must be deducted at source while making payments such as salary, rent, commission, professional fees, etc. This amount is submitted to the government by the deductor. For example, if an NRI sells his house, the buyer has to deduct a certain amount from the seller and pay the taxes. It is the duty of the buyer to deduct TDS.
I can go on and talk more about withholding tax. But as of now, I am ending here. I hope you get the idea behind what is withholding tax in India.
Read more:
How To Download TDS Certificate?
How Can I Pay TDS Without PAN Card?
How To Download TDS Payment Challan?
What is withholding tax?
Samapreet
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2022-03-31T18:23:31+00:00 2022-03-31T18:23:33+00:00Comment
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