Section 195, tds on reimbursement of expenses
This query is : Resolved
19 December 2012
Broadly speaking, when a French entity seconds expatriates to an Indian entity, the French entity continues to endure social charges on these expats. Therefore, the French entity invoices the Indian entity hosting the expatriates for the reimbursement of these costs.
Assume that these payments are not made under a service agreement or anything, they are purely reimbursement of costs.
My understanding is that under Indian tax law, this kind of payment is not subject to any withholding tax (and as it is outside of the scope of any withholding tax, no PAN or specific formality is required from the French entity). Also, under the India-France DTAA, no withholding tax shall apply.
Can you confirm my understanding is correct ?
Assume that these payments are not made under a service agreement or anything, they are purely reimbursement of costs.
My understanding is that under Indian tax law, this kind of payment is not subject to any withholding tax (and as it is outside of the scope of any withholding tax, no PAN or specific formality is required from the French entity). Also, under the India-France DTAA, no withholding tax shall apply.
Can you confirm my understanding is correct ?
19 December 2012
Your thinking is correct as reimbursement does not have income element for the party which is received the money hence sec. 195 is anyway not applicable. Still you will have to get CA certificate and file form 15 CA for the remittance. for this even reference of DTAA is not necessary and amount itself is not chargeble to income tax in india.
19 December 2012
Thank u Mr. Biyani. Can u please give any case laws also supporting the query?
19 December 2012
i have made foreign payments many time for reimbursement expenses without tds under advise of different CAs. for case law you can google out.
19 December 2012
Thanks a lot for help
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS Challan - change of FY 2025-26 to TY 2026-27
- Price inclusive or exclusive of GST while made entry in P& L Account
- Gst registered proprietorship firm
- Dep. as per companies act
- Applicability of GST on Salary Reimbursement Component
- AUDITOR APPOINTMENT FOR THE YEAR ENDING MARCH 27
- Minimum tax payable to file Updated return
- UDIN ISSUE
- Change Of Karta In Case of Death
- TDS on purchase of under construction property from a reseller
- Non filing of I T Returns
- How to Handle Active E-Invoices in GST Portal Deleted from Tally?
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Starting trading business
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
