Tds for foreigners

This query is : Resolved

Ramesh M (Querist)
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04 August 2011 Could you please guide me on behalf of some relatives. We (they) are based in Nepal. No office or PAN in India. We are agents for an Indian company for supplying their material directly to Nepalese importers. We understand that our work is done in Nepal, and the income arises in Nepal (not in India). So can the Indian company claim to deduct TDS on the basis of Section 206AA of Finance Act 2009. Can you provide me link to some govt. notification etc. which would provide me relief so that TDS is not deducted. - R. Mittal, B.Com., LLB.

Ravi Jhamb

Ravi Jhamb (Expert)
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04 August 2011 As per section 9 income arise or accure from india is taxable in hands of assess. In your case income arise from india bcz indian company will pay the lumpsum amount for providing service. You didnot have pan card that means 20% TDs should deducted

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Ramesh M

Ramesh M (Querist)
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04 August 2011 As far as we are concerned, we work in Nepal, provide the service here, and so our income arises here. We think : Section 206AA of Finance Act 2009 is applicable to any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB. This chapter provides for TDS deduction for incomes arising in India (whether for Indians or non residents). Our income arises in Nepal. For the Indian Company, it is the expense which arises. Please advise friends.

U S Sharma

U S Sharma (Expert)
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04 August 2011 its sales promotion expenses or commission of sales for indian company which is paid to yourself and the same is liable for TDS.

if you import the goods directly from indian company and sale/transfer afterwards in nepal, then indian company does not have to deduct TDS.

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Ramesh M

Ramesh M (Querist)
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04 August 2011 No No. This is serious. I need to have a concrete reply.

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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05 August 2011 IN TERM SOF SECTION 195 TAX IS DEDUCTIBLE ONLY IF NON-RESIDENTS INCOME IS LIABLE TO TAX IN INDIA
IN THIS CASE THE INCOME IS NOT LIABLE TO TAX IN INDIA HENCE NO TDS IS REQD
SECTION 206A WILL COME IN PICTURE ONLY IF TAX IS DEDUCTIBLE

CA MANOJ GUPTA
JODHPUR
09828510543

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