Lack of Reasoned Order on FTS Classification Invalidates 10% Tax Withholding; Delhi High Court Cuts Rate to 2%

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Lack of Reasoned Order on FTS Classification Invalidates 10% Tax Withholding; Delhi High Court Cuts Rate to 2%

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Published on

28/02/2026

By Mariya Paliwala

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The Delhi High Court has ruled that a tax withholding certificate issued without adequate reasoning on whether payments qualify as “Fees for Technical Services” (FTS) cannot be sustained, directing authorities to reduce the deduction rate from 10% to 2%. The Bench of Justice Dinesh Mehta and Justice Vinod Kumar observed that the Competent Authority did…

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Mariya Paliwala https://www.jurishour.in/

Mariya is the Senior Editor at Juris Hour. She has 7+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started her career as a freelance tax reporter in the leading online legal news companies.

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Lack of Reasoned Order on FTS Classification Invalidates 10% Tax Withholding; Delhi High Court Cuts Rate to 2%

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