What to do
Read the contract before you pick a rate. A fee for the firm's own staff to do the work is usually a service. A payment for the use of a patent, design, secret process or commercial experience can be a royalty. The words on the invoice do not decide it.
Ask how long the UAE firm's people have been in India on this project. Article 5(2)(i) adds up the time on the same or a connected project inside any twelve months. More than nine months is a service permanent establishment (PE). A shorter visit does not answer the fixed-place test or the agent test. Those are on the permanent establishment page.
Article 7 says the profit is taxable in India only so far as it is attributable to a permanent establishment. If you conclude the remittance is not chargeable, the Form 145 note says Part D is the part, and that part does not require a TDS deduction. Do not file Part D from the invoice label alone. A practising CA has to be able to say why the sum is not chargeable.
If it is a royalty and the recipient is the beneficial owner, Article 12 caps the Indian tax at 10 per cent of the gross. That cap needs the treaty papers. This page does not state the domestic rate that applies when those papers are missing.
Collect the company's tax residency certificate (TRC) for the Indian year of the payment, and Form 41. For income up to 31 March 2026 the form is still Form 10F. The Form 41 FAQ says that without a valid electronically filed Form 41, together with the certificate, the payer deducts at the rate that applies.
File Form 145 before the bank sends the money. A company does not get the individual exemption in the Form 145 note. If the payment is chargeable, the year's total to non-residents is over ₹5 lakh, and you do not hold an officer's certificate, Form 146 comes first and then Part C. The parts are on the company guide.
A missing PAN is a different rule. This page does not turn it into a flat percentage. Use the no-PAN page. If the contract says the consultant is paid a stated sum free of Indian tax, use the gross-up page. GST on an imported service is the reverse-charge page.
Send the contract and the invoice, and we will say which article applies before the bank is asked for the form.
If the two companies are in one group
A fee to a UAE company that your Indian company owns, or that owns you, can also be an international transaction. The accountant's report is Form 3CEB. That filing is already on the transfer-pricing page. The treaty still has an associated-enterprises article. This page does not restate the penalties or the documentation threshold.
The UAE company's own view of the same invoice is the no fees-for-technical-services page. If the certificate's dates do not cover the Indian year, use the timing page.
What we will not tell you to do
We will not say the deduction is nil because the treaty has no fees-for-technical-services article. We will not say last year's certificate covers a payment this year. We will not name a domestic percentage for a service fee. If tax that should have been deducted was not deducted, the payer can be asked for it. We do not put a new section number on that sentence.