Regarding TDS deduction before 15CA filing
This query is : Resolved
10 January 2025
TDS is required to be deducted on foreign remittance for purpose code s1502 and recipient is in Czech republic country?
12 August 2025
You're asking whether TDS is required on a foreign remittance to a recipient in the Czech Republic, using purpose code S1502 — which refers to:
S1502: "Import of goods" (without import license requirement)
Let’s clarify this step by step:
✅ 1. Is TDS required under Section 195 (S1502 – Import of Goods)?
In general:
No TDS is required if the payment is for import of goods and the income is not chargeable to tax in India.
As per CBDT Circular No. 786 dated 7 February 2000 (still followed in principle, though withdrawn later for procedural reasons):
“No tax is required to be deducted under Section 195 on payments for import of goods as the same is not chargeable to tax in India.”
So, if you're importing goods from the Czech Republic and paying the supplier:
✅ No TDS is required under Section 195,
❌ Unless the supplier has a permanent establishment or business connection in India.
📄 2. Use of Form 15CA/15CB
Form When Required
15CA (Part D) When remittance is not chargeable to tax and TDS is not required.
15CB Needed only if remittance is taxable, and TDS deduction is required.
In your case — for genuine goods import under S1502 — you will likely file only Form 15CA (Part D).
🌐 3. Recipient in Czech Republic – Does DTAA Apply?
Yes, India has a DTAA (Double Taxation Avoidance Agreement) with the Czech Republic, but DTAA is relevant only if the income is taxable in India.
Since goods import income is not taxable in India, DTAA doesn’t apply here.
🔎 ✅ Summary:
Question Answer
Purpose code S1502 – Import of goods
Recipient country Czech Republic
Is TDS applicable under Section 195? ❌ No, if it’s a genuine goods import
Required form ✅ 15CA – Part D (no TDS required)
DTAA impact ❌ Not applicable unless income is taxable
✅ Final Recommendation:
Maintain proper documentation (invoice, contract, bill of entry, etc.) to prove it is a goods import.
File Form 15CA (Part D) on the income tax portal before remittance.
No need to deduct TDS unless income is found taxable in India (which is rare for goods import).
S1502: "Import of goods" (without import license requirement)
Let’s clarify this step by step:
✅ 1. Is TDS required under Section 195 (S1502 – Import of Goods)?
In general:
No TDS is required if the payment is for import of goods and the income is not chargeable to tax in India.
As per CBDT Circular No. 786 dated 7 February 2000 (still followed in principle, though withdrawn later for procedural reasons):
“No tax is required to be deducted under Section 195 on payments for import of goods as the same is not chargeable to tax in India.”
So, if you're importing goods from the Czech Republic and paying the supplier:
✅ No TDS is required under Section 195,
❌ Unless the supplier has a permanent establishment or business connection in India.
📄 2. Use of Form 15CA/15CB
Form When Required
15CA (Part D) When remittance is not chargeable to tax and TDS is not required.
15CB Needed only if remittance is taxable, and TDS deduction is required.
In your case — for genuine goods import under S1502 — you will likely file only Form 15CA (Part D).
🌐 3. Recipient in Czech Republic – Does DTAA Apply?
Yes, India has a DTAA (Double Taxation Avoidance Agreement) with the Czech Republic, but DTAA is relevant only if the income is taxable in India.
Since goods import income is not taxable in India, DTAA doesn’t apply here.
🔎 ✅ Summary:
Question Answer
Purpose code S1502 – Import of goods
Recipient country Czech Republic
Is TDS applicable under Section 195? ❌ No, if it’s a genuine goods import
Required form ✅ 15CA – Part D (no TDS required)
DTAA impact ❌ Not applicable unless income is taxable
✅ Final Recommendation:
Maintain proper documentation (invoice, contract, bill of entry, etc.) to prove it is a goods import.
File Form 15CA (Part D) on the income tax portal before remittance.
No need to deduct TDS unless income is found taxable in India (which is rare for goods import).
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