tds

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Querist : Anonymous

Querist : Anonymous (Querist)

23 June 2011 is tds to be deducted on advertisement made through facebook?is it to be treated like normally how tds is deducted on advertisement?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 June 2011 TDS on advertisement is required to be deducted U/s 194C.

A single payment below 30000/ is exempt provided the annual payments do not exceed Rs 75000/-.

While making payment to the agency , you can deduct the amount and after filing e-tds return you may issue a certificate.

Querist : Anonymous

Querist : Anonymous (Querist)

23 June 2011 facebook being foreign co. does DTAA comes into existence...same rate is to be applied for deduction of tds?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 Great question! Here’s how it works for **Facebook (a foreign company)** when it comes to TDS on advertisement payments:

### 1. **TDS applicability on Facebook (foreign company):**

* Since Facebook is a foreign company, payment for advertisement services to them is a payment made to a non-resident.
* **Section 195** of the Income Tax Act applies to payments made to non-residents.
* You are required to deduct TDS **under Section 195** on the gross amount paid to Facebook.

### 2. **Rate of TDS:**

* The TDS rate is generally **40% (plus applicable surcharge and cess)** under the Income Tax Act for non-residents.
* However, **DTAA (Double Taxation Avoidance Agreement)** between India and the USA (Facebook's country of residence) may provide a lower rate.
* You should check the applicable DTAA rate and deduct TDS accordingly, but **deduct TDS at the lower of the DTAA rate or the Income Tax Act rate**.
* Also, if you want to pay tax at the DTAA rate, you should ideally obtain a **Tax Residency Certificate (TRC)** and possibly get a **No Objection Certificate (NOC)** or lower withholding certificate from the Indian tax authorities.

### 3. **Is the payment treated like advertisement for domestic TDS sections?**

* For domestic entities, advertisement payments come under **Section 194C or 194J** sometimes, but for foreign entities, **Section 195 is the key provision**.
* The thresholds/exemptions applicable under domestic sections (like Rs 30,000 per transaction or Rs 75,000 annually) **do NOT apply** for payments to non-residents.

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### Summary:

| Scenario | Section | Rate (approx) | Remarks |
| --------------------------------------- | ------------ | ------------------ | ---------------------- |
| Advertisement to Indian co. | Section 194C | 1% or 2% | Thresholds apply |
| Advertisement to Facebook (foreign co.) | Section 195 | 40% or as per DTAA | No threshold exemption |

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If you want, I can help you draft a formal note or provide links to DTAA details for India-USA. Would you like that?

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