Payments to foreign company

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Dinesh V (Querist)
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24 December 2011 Dear CAC Members,

I have query regarding payment made to foreign company by a Indian Company for subscription of online magazine .Whether Tds provisions is applicable to the assessee U/s sec 195 of the Income Tax Act.It would be great help if you give me the solution for same.

Regards

DINESH

Vishal D Shah

Vishal D Shah (Expert)
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25 December 2011 Could be taxable under act. Refer sec 9.1.6 & 9.1.7.
Also check dtaa provisions. Recent Samsung ruling applicability.
Would depend nature of information from online magazine. Generally this is non taxable item.

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CA Abhishek Rana

CA Abhishek Rana (Expert)
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26 December 2011 Dear Dinesh , in this case tax is not deductible provided the company publishing the magazine does not have any business connection in India, therefore no part of its income is deemed to accue or arise in India.

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CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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26 December 2011 The same shall be taxable , in terms of 2 recent Karnatka High Court Rulings in cases of Infosys & Wipro.

Anuj
+91-9810106211
femaquery@gmail.com

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Dinesh V

Dinesh V (Querist)
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26 December 2011 @ Vishal D Shah Thanks alot.

@ CA Abhishek Rana Thanks alot for the valuable information.I too thought the same.

@ CA.Anuj Gupta I refered the Wipro case Vide CIT vs Wipro Ltd vs ITO (2005)4(II)ITCL 268 (Bang "B" Trib):(2005)94 ITD 9(Bang-Trib):(2005)92 TTJ 796 (Bang Trib):2005 1 SOT 663(Bang-Trib).In this case bangalore tribunal favoured the assessee ie no need to deduct TDS.

So we have to follow the tribunal or the karnataka high court Sir.Please could you quote the case no of the high court judgement sir.Eagerly awaiting for the reply.Anyway thanks alot sir.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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27 December 2011 Dinesh, Learn simple things . An High Court Order is manadatory to be followed and it overules or confirms an ITAT order.

Anuj
+91-9810106211
femaquery@gmail.com

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Dinesh V

Dinesh V (Querist)
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27 December 2011 @ CA Anuj Gupta ok Sir.So we have to deduct TDS, May i know at what rate it should be dedcuted incase the foreign compnay does not have PAN no.May i also know case no of the high court judgement.

Vishal D Shah

Vishal D Shah (Expert)
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27 December 2011 CIT v. Wipro Ltd. (ITA No. 2804/2005, dated 15 October 2011.

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Vishal D Shah

Vishal D Shah (Expert)
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27 December 2011 CIT v. Wipro Ltd. (ITA No. 2804/2005, dated 15 October 2011.

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CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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27 December 2011 TDS shall be deducted @20% if the foreign party doesn't have PAN.

Anuj
+91-9810106211
femaquery@gmail.com

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Dinesh V

Dinesh V (Querist)
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27 December 2011 @ Vishal D Shah thanks alot !!!

@ CA.Anuj Gupta ok sir so it should be deducted u/s 195(g)@ 20%

https://www.saraltaxoffice.com/resources/tds-rates.php

Anyway thanks alot Sir.It was great help for me.

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