Tds
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
24 October 2013
is payment made by an educational society for advertising in a newspaper in Khatmandu(nepal) liable to TDS.
24 October 2013
Yes
Educational Institution Must Liable to TDS
Educational Institution Must Liable to TDS
Querist : Anonymous
Querist :
Anonymous
(Querist)
24 October 2013
under what section and what percentage of TDS is liable to be deducted.
27 July 2025
For payment made by an **educational society** for **advertising in a newspaper in Kathmandu (Nepal)**, here’s the TDS applicability:
---
### 1. **Is TDS applicable?**
* Yes, TDS is applicable even if the payment is made to a foreign entity (Nepal).
* Since the payment is for **advertising services**, it falls under **Fees for Technical Services** or **Professional fees** for tax purposes.
* The payer (educational society) is liable to deduct TDS under **Section 195** (Payments to Non-Residents).
---
### 2. **Which section applies?**
* **Section 195** of the Income Tax Act applies for all payments to non-residents.
* The exact rate depends on:
* The nature of payment (advertising is considered as business income or technical services).
* The Double Taxation Avoidance Agreement (DTAA) between India and Nepal.
---
### 3. **What rate of TDS applies?**
* Under the India-Nepal DTAA, the tax rate for business profits or fees for technical services is generally **10%** (subject to conditions).
* If no DTAA benefit is claimed, the **domestic rate** could be higher (usually 10%-30% depending on classification).
* Usually, **10% TDS** is deducted on technical service fees or business income payments under DTAA.
---
### Summary:
| Factor | Details |
| -------------------- | --------------------------------------------------------- |
| Payment type | Advertising charges (business income / technical service) |
| Payee | Newspaper in Kathmandu, Nepal (non-resident) |
| Applicable section | Section 195 |
| TDS rate under DTAA | Usually 10% |
| Without DTAA benefit | Higher domestic rate (20-30%) |
---
**Important:**
The educational society should obtain a **Tax Residency Certificate (TRC)** from the Nepalese newspaper to avail the DTAA benefits and deduct TDS accordingly.
---
---
### 1. **Is TDS applicable?**
* Yes, TDS is applicable even if the payment is made to a foreign entity (Nepal).
* Since the payment is for **advertising services**, it falls under **Fees for Technical Services** or **Professional fees** for tax purposes.
* The payer (educational society) is liable to deduct TDS under **Section 195** (Payments to Non-Residents).
---
### 2. **Which section applies?**
* **Section 195** of the Income Tax Act applies for all payments to non-residents.
* The exact rate depends on:
* The nature of payment (advertising is considered as business income or technical services).
* The Double Taxation Avoidance Agreement (DTAA) between India and Nepal.
---
### 3. **What rate of TDS applies?**
* Under the India-Nepal DTAA, the tax rate for business profits or fees for technical services is generally **10%** (subject to conditions).
* If no DTAA benefit is claimed, the **domestic rate** could be higher (usually 10%-30% depending on classification).
* Usually, **10% TDS** is deducted on technical service fees or business income payments under DTAA.
---
### Summary:
| Factor | Details |
| -------------------- | --------------------------------------------------------- |
| Payment type | Advertising charges (business income / technical service) |
| Payee | Newspaper in Kathmandu, Nepal (non-resident) |
| Applicable section | Section 195 |
| TDS rate under DTAA | Usually 10% |
| Without DTAA benefit | Higher domestic rate (20-30%) |
---
**Important:**
The educational society should obtain a **Tax Residency Certificate (TRC)** from the Nepalese newspaper to avail the DTAA benefits and deduct TDS accordingly.
---
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