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Payment to foreign consultant

samir prasad (Director-Operations) (31 Points)

29 June 2015

Hello sir/madam

i have a situation here, please help me out.. i have a foreign consultant, who looks after our sales in UK and works on commission basis. now i have to pay him his commission, so need to know my payment will be after TDS or just i have to pay him his full amount of commission.

thank you.

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4 Replies

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 29 June 2015

In 15CA just gross the amount since you have to pay in full and you as company will bear the TDS

for eg if you have to pay 1000 dollars and if TDS is 10% gross the maount as 1111 dollars and TDS will be 111 dollars and net maount will be 1000 dollars

Naveen Rishi Kumar (Director) (53 Points)
Replied 29 June 2015

This being business income should not be subject to TDS if the agent does not have a PE in India.

Anubhav (Chartered Accountant) (429 Points)
Replied 29 June 2015

Hi,

As per our understanding and based on the facts provided by you, TDS implication arises in case income accrues or arises or is deemed to accrue or arise to him in India as per Section 9 of The Income Tax Act,1962 ('ITA'). For getting into the conclusion as to deduction of tax under section 195 of ITA further facts need to be provided which are as follows:-

1. Nature of sales support provided by the agent.

2. PE status of commission agent in India.

Based on the details to be provided we can come to a conclusion.

Further for remittance abroad we need to file Form 15CA and form 15CB.

In case of any further query PM or mail us.

Anubhav Jain

anubhavjain176 @ gmail.com

9868729930