Sec 195
This query is : Open
SANDEEP KUMAR
(Querist)
02 April 2014
Dear Experts,
I need your help regarding applicability of Sec 195 of Income Tax act.
One Indian company is making payment to foreign branch of another Indain Co in Singapore Dollar.
Weather witholding tax is applicable U/s 195??
I need your help regarding applicability of Sec 195 of Income Tax act.
One Indian company is making payment to foreign branch of another Indain Co in Singapore Dollar.
Weather witholding tax is applicable U/s 195??
Gangavarapu Abhilash
(Expert)
02 April 2014
Dear Sandeep,
The place of transaction is not the criteria for determination of application of sec 195
It is the residential Status that matters(residential status of receiver)
As per section 6(3), an Indian company is always resident in India. A foreign
company is resident in India only if, during the previous year, control and
management of its affairs is situated wholly in India.
In your case as the receiver of the payment is branch of Indian company, it is clearly evident that it is Resident
So Section 195 of income tax act is not applicable as it is payment to Resident
Regards,
Abhilash.
The place of transaction is not the criteria for determination of application of sec 195
It is the residential Status that matters(residential status of receiver)
As per section 6(3), an Indian company is always resident in India. A foreign
company is resident in India only if, during the previous year, control and
management of its affairs is situated wholly in India.
In your case as the receiver of the payment is branch of Indian company, it is clearly evident that it is Resident
So Section 195 of income tax act is not applicable as it is payment to Resident
Regards,
Abhilash.
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