Tds
This query is : Resolved
11 November 2013
our client (a company) paid a sum of $49432 to a sponsorer in newyork for sponsorship.
whether tds should be deducted on the amt.
please reply
whether tds should be deducted on the amt.
please reply
12 November 2013
Mr Arbaz
You need to follow procedure of Form 15CA and 15CB.
CA will determine the amount of TDS depending upon the Invoice and actual services received. CA will issue a Certificate.
contact@vkbajaj.co.in
You need to follow procedure of Form 15CA and 15CB.
CA will determine the amount of TDS depending upon the Invoice and actual services received. CA will issue a Certificate.
contact@vkbajaj.co.in
Message likes :
1 times
12 November 2013
Respected Sir,
India is in DTA agreement with USA and when i read the agreement i found that the amt is taxable in newyork and not in India.
so what is the solution/procedure now ?
please reply Sir.
thank you
India is in DTA agreement with USA and when i read the agreement i found that the amt is taxable in newyork and not in India.
so what is the solution/procedure now ?
please reply Sir.
thank you
27 July 2025
Great question! Here’s how this works:
---
### Sponsorship Payment to a Non-Resident (USA) & TDS Implications
1. **Nature of Payment:**
* Sponsorship fees generally fall under **"Business Income"** or **"Royalty/Fees for Technical Services"** depending on the contract terms.
* Usually, sponsorship is treated as business income for the recipient.
2. **DTAA between India and USA:**
* As per the **DTAA (Double Taxation Avoidance Agreement)** between India and USA, business income is taxable **only in the country where the enterprise is resident**, unless the non-resident has a **permanent establishment (PE)** in India.
* Since the sponsor is in New York and likely has no PE in India, income will be taxable only in the USA.
3. **TDS Applicability:**
* Under **Section 195** of the Income Tax Act, any payment to a non-resident that is chargeable to tax in India requires deduction of TDS.
* But since the DTAA states the income is taxable only in the USA, **TDS should not be deducted**.
4. **Procedure:**
* You must still file **Form 15CA and 15CB**:
* **Form 15CB**: Certificate from a Chartered Accountant confirming the nature of payment and applicability (or non-applicability) of TDS as per DTAA.
* **Form 15CA**: Declaration by the remitter.
* Based on the CA certificate stating DTAA benefit, **no TDS will be deducted**.
---
### Summary:
| Point | Action/Status |
| ------------------------------- | ----------------------------- |
| Nature of payment | Sponsorship (business income) |
| Taxability under DTAA | Taxable only in USA |
| TDS deduction under Section 195 | **No TDS deduction required** |
| Filing Forms | Form 15CA & 15CB required |
---
If you want, I can help draft the CA certificate format or guide you on filling Form 15CA/15CB. Would you like that?
---
### Sponsorship Payment to a Non-Resident (USA) & TDS Implications
1. **Nature of Payment:**
* Sponsorship fees generally fall under **"Business Income"** or **"Royalty/Fees for Technical Services"** depending on the contract terms.
* Usually, sponsorship is treated as business income for the recipient.
2. **DTAA between India and USA:**
* As per the **DTAA (Double Taxation Avoidance Agreement)** between India and USA, business income is taxable **only in the country where the enterprise is resident**, unless the non-resident has a **permanent establishment (PE)** in India.
* Since the sponsor is in New York and likely has no PE in India, income will be taxable only in the USA.
3. **TDS Applicability:**
* Under **Section 195** of the Income Tax Act, any payment to a non-resident that is chargeable to tax in India requires deduction of TDS.
* But since the DTAA states the income is taxable only in the USA, **TDS should not be deducted**.
4. **Procedure:**
* You must still file **Form 15CA and 15CB**:
* **Form 15CB**: Certificate from a Chartered Accountant confirming the nature of payment and applicability (or non-applicability) of TDS as per DTAA.
* **Form 15CA**: Declaration by the remitter.
* Based on the CA certificate stating DTAA benefit, **no TDS will be deducted**.
---
### Summary:
| Point | Action/Status |
| ------------------------------- | ----------------------------- |
| Nature of payment | Sponsorship (business income) |
| Taxability under DTAA | Taxable only in USA |
| TDS deduction under Section 195 | **No TDS deduction required** |
| Filing Forms | Form 15CA & 15CB required |
---
If you want, I can help draft the CA certificate format or guide you on filling Form 15CA/15CB. Would you like that?
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