T.D.S on Reimbursement to parent Foreign Company
This query is : Resolved
Dharmesh k. Dubey
(Querist)
02 November 2009
Dear Sir & frndz ,
A pvt ltd co. say A Pvt. Ltd , WOS of an Italian Co. ,want to reimburse foreign Air travelling expenses incurred by the parent foregin co. on its behalf . so is T.D.S deductible on dis payment as per Sec 195 , as the nature of this payment is purely reimbursement ?
A pvt ltd co. say A Pvt. Ltd , WOS of an Italian Co. ,want to reimburse foreign Air travelling expenses incurred by the parent foregin co. on its behalf . so is T.D.S deductible on dis payment as per Sec 195 , as the nature of this payment is purely reimbursement ?
CA SANJAY MUKHERJEE
(Expert)
02 November 2009
As per Section 195, income of non resident which is taxable in India is subject to TDS.
As per my understanding TDS is not applicable in your case.
As per my understanding TDS is not applicable in your case.
taxindiaconnect
(Expert)
02 November 2009
Section 195 of the Act casts an obligation on a resident tax payer making payment to a non resident in respect of an income taxable in India to withhold tax at the rates applicable. The tax is not required to be deducted from the payments made outside India to a NR if the income of NR is not taxable in India. The income of the NR is taxable in India if it satisfies certain conditions.
As per section 5 the income of NR should have been either be received or deemed to be received in India or should be accrue or deemed to accrue in India for such income to be taxable in India. IN the present query the reimbursement may have an element of profit unless the reimbursements are fully supported by the actual bills / tickets etc. In case the reimbursement is not supported by the actual bills / tickets you need to deduct TDS on this. In the otherewise case No TDS is required to be deducted from such payments as mentioned in your query.
As per section 5 the income of NR should have been either be received or deemed to be received in India or should be accrue or deemed to accrue in India for such income to be taxable in India. IN the present query the reimbursement may have an element of profit unless the reimbursements are fully supported by the actual bills / tickets etc. In case the reimbursement is not supported by the actual bills / tickets you need to deduct TDS on this. In the otherewise case No TDS is required to be deducted from such payments as mentioned in your query.
Dharmesh k. Dubey
(Querist)
03 November 2009
thnx rajeshji.
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