Application of tds on payment to foreign party

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Anjitha Elizabeth Innocent (Querist)
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12 January 2013 Dear all,

Is tds applicable on commission on agency service paid to a foreign party paid from India???

Thanking in anticipation

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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13 January 2013 No

Anuj
Femaquey@gmail.com

Anjitha Elizabeth Innocent

Anjitha Elizabeth Innocent (Querist)
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14 January 2013 Sir,
Can you plz explain your answer.
As per sec 40(a) of Income Tax Act,Notwithstanding anything to the contrary in sections 30 to 16 [38], the following amounts shall not be deducted in computing the income chargeable under the head “Profits and gains of business or profession”,—

(a) in the case of any assessee—

[(i) any interest (not being interest on a loan issued for public subscription before the 1st day of April, 1938), royalty, fees for technical services or other sum chargeable under this Act, which is payable,—

(A) outside India; or

(B) in India to a non-resident, not being a company or to a foreign company, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-section (1) of section 200 :

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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14 January 2013 Kindly read sec. 5 (2)which provides for charge ability of income before taxation in India.

Commission income is neither accruing or arising nor is deemed to accrue or arise in India.

Anuj
Femaquery@gmail.com

Anjitha Elizabeth Innocent

Anjitha Elizabeth Innocent (Querist)
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14 January 2013 Thankyou sir for your answer whioch helped me to clarify my doubt completely.

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