Sec. 195 - TDS on foreign remittance

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Dilen (Querist)
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08 December 2009 Dear colleagues,

Please throw some light on the doubt I am having regarding TDS u/s 195.

1-Will the remittance made towards INSURANCE PREMIUM FOR ASSSETS in India, to the insurers in US and UK be considered as income accruing/deemed to be accruing in India for them (they dont have a PE in India)?

2-Will such remittance attract TDS u/s 195? Or should they be considered u/s 194C as payment made to Foreing companies - TDS @ 2.175% (see WIRC reference manual 2009-10, TDS section)?

3-If u/s 195, then should the rate of TDS be 40%+Surcharge and Cess - the one for other incomes?

4-Same questions as mentioned in 1-3 for Rental payment remittances - movable assets being in India, but belonging to companies in US.

Awaiting suggestions and guidances.

Thanks.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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14 March 2011 1.)As per Income Tax Act, YES, but you may escape through DTAA.
2.)No,the same shall be covered u/s 195.
3.)Kindly see Article 7 for insurance or reinsurance business.
4.) Taxable in India see Article 6 of respective DTAA.

Anuj
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