Tds u/s 195 (Income Tax)

This query is : Resolved

rohit kumar

( Author )
22 October 2012

Q1)If a person "A" has to make a payment of Rs 10 lacs to some another person "B" residing outside India in respect to consultancy services. But the problem is that A dont have money so he decided that he will give his shares to B (Share value is Rs 10 Lacs). Then in this case how will "A" deduct TDS u/s 195.

CA BHUVNESH S.VILAYATRANI

( Expert )
22 October 2012

Section 195 clearly specifies clearly that a Person responsible for making payment to a non-corporate non-resident Assessee or to a Company other than a Domestic company,of any interest(other than interest on Securities) or any other sum(not being Salary)is required at the time of payment or at the time of credit to the account of payee,interest payable account or suspense account or at the time of payment there of in cash or by issue of cheques/draft or by ANY OTHER MODE is required to deduct TDS.hence it is clear that TDS has to be deducted..

rohit kumar

( Author )
25 October 2012

But the problem is that how will how will he deduct TDS i.e, in which mode. Another problem is that deductee is not ready to pay cash for tds amount and deductor has only shares. So how will deduction be made??

C A S.S.Agarwal, M.Com.,LL.B,

( Expert )
23 November 2012

Section 195 is applicable if the services are rendered in India or the income is generated in India and if the services are rendered outside India it is not applicable.