Outward remittance
This query is : Resolved
17 October 2011
Dear All,
Whether all foreign payment (outward remittance) are covered in the perview of Section 195?
Whether TDS is deducted for payment made towards the purchase of Materials ???
Kindly provide the clarity regarding the applicability of Section 195...
thnxs
Whether all foreign payment (outward remittance) are covered in the perview of Section 195?
Whether TDS is deducted for payment made towards the purchase of Materials ???
Kindly provide the clarity regarding the applicability of Section 195...
thnxs
17 October 2011
Hi,
Section 195 is a very wide section and TDS would be applicable only if the income is chargeable to tax in India (either directly under Sec 5 or under deeming provisions of Section 9). Thus the steps to be followed will be :
Step 1: Make the classification of transaction (eg u/s 9(1)(i) resp. dealing with Business transaction
in general etc)
Step 2: Check the taxability under Income Tax Act
Step 3: If Above is in affirmative, Check as per treaty entitlement and DTAA (if
any), taxability under DTAA (ie with regard to PE etc).
In my view, if the exporter payee has no business connection or PE (per DTAA) in India, then there would be no TDS applicable on the import of materials.
Section 195 is a very wide section and TDS would be applicable only if the income is chargeable to tax in India (either directly under Sec 5 or under deeming provisions of Section 9). Thus the steps to be followed will be :
Step 1: Make the classification of transaction (eg u/s 9(1)(i) resp. dealing with Business transaction
in general etc)
Step 2: Check the taxability under Income Tax Act
Step 3: If Above is in affirmative, Check as per treaty entitlement and DTAA (if
any), taxability under DTAA (ie with regard to PE etc).
In my view, if the exporter payee has no business connection or PE (per DTAA) in India, then there would be no TDS applicable on the import of materials.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Refund Annexure-B
- Liable to deduct tds and 44ADA
- Sale of Equity shares for Purchase of Residential Property
- Nomination of Bank for refund in itr 2
- Section 56(2) of the Income tax Act 1961 , Gift to relative .
- ECO SUPPLY REPORTIONG IN GSTR-1
- Is Interest applicable for payment made through credit ledger vide DRC03 for FY 2020-21 & 2021-22
- CCFS 2026 Schemed
- Subscription paid to foreign customer
- Two seprate Invoice needed
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
