PROFESSIONAL SERVICES IN INDIA BY NEPAL RESIDENT

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This discussion clarifies the Tax Deducted at Source (TDS) liability for an Indian partnership firm paying a Nepal resident for professional services rendered in India. The key takeaway, supported by an ITAT Mumbai ruling, is that if the services provided do not result in making available technical knowledge or expertise, the professional fees paid are generally not subject to TDS under Section 195. The specific case involved coaching software preparation, which was deemed professional in nature but still not subject to TDS as per the ruling.

vipin minocha

vipin minocha (Querist)
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15 May 2020 A Partnership Firm engaged in coaching work at Delhi and has to pay a sum of Rs.200000/- (Two Lacs Only) to a Nepal Resident who provided professional services in India. What is a TDS liability of Indian Partnership firm.

Vipin Kumar
Haryana

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 May 2020 ACIT Vs Ms. KPMG (ITAT Mumbai)
Conclusion:
Since the nature of services rendered by non-resident professional showed that none of the services resulted in making available of any technical knowledge, experience, skill, know, how or process, therefore, professional fee paid to non-residents could not be subjected to TDS under section 195.

vipin minocha

vipin minocha (Querist)
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16 May 2020 SIR,

IN MY VIEW THE SERVICES ARE OF PREPARATION OF COACHING SOFTWARE WHICH ARE OF PROFESSIONAL NATURE. SO , KINDLY ADVISE THE TDS LIABILITY.

THANKING YOU

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 May 2020 No TDS applicable in case of professional service.

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