TDS on branding fees to a sport event in foreign

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HITESH KHONA (Querist)
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01 October 2008 Hi, all

I require the answer very urgently

I a company makes payment from India as branding fees for an sporting event in America. What is the TDS rate applicable and in which section it is applicable?

Thanks & Regards.
Hitesh Khona

CA V. Mohanakrishnan

CA V. Mohanakrishnan (Expert)
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01 October 2008 the sec applicable is 195.

As far as the rates are concerned it depends on whether the receipient is a non-resident and non-corporate assessee.

It is different for a corporate assessee

HITESH KHONA

HITESH KHONA (Querist)
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03 October 2008 thanks for the reply
Sir Could u tell me what are the rates applicable for the payment to Corporate Assessee.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 Here’s a clear answer about **TDS on branding fees paid to a foreign sports event organizer**:

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### 1. **Applicable Section:**

* **Section 195 of the Income Tax Act** applies when making payments to a non-resident, including foreign companies, for any income earned in India.

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### 2. **Nature of Payment:**

* Branding fees for a sporting event held outside India is considered a **fee for technical or professional services** or **business income**, depending on the nature of the agreement.
* However, since the event is outside India, it depends on whether this payment is taxable in India or not.

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### 3. **TDS Rate:**

* The **rate under Section 195** depends on the **DTAA (Double Taxation Avoidance Agreement)** between India and the USA.
* Generally, **business income** TDS rates for corporate recipients under DTAA are between **10% to 15%**, but you must check the India-USA DTAA for exact rates.
* Without DTAA, the default TDS rate can be as high as **40% (plus surcharge and cess)**.

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### 4. **Action:**

* The company must **deduct TDS on gross payment before remitting** the branding fees to the foreign party.
* The **TDS certificate** (Form 16A) is issued to the foreign party.

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### 5. **Additional Notes:**

* If the payment is for use of trademark or brand name, it may be treated as **royalty** under Section 9(1)(vi), attracting different rates under DTAA.
* To be sure of the TDS rate and section, it’s best to verify with a tax consultant or check the exact terms of the payment and relevant treaty provisions.

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### Summary Table:

| Aspect | Details |
| ----------------- | ------------------------------------------ |
| Section | 195 |
| Nature of Payment | Branding Fees (Business Income or Royalty) |
| TDS Rate | As per India-USA DTAA (usually 10-15%) |
| Without DTAA | 40% plus surcharge and cess |
| Deduction | On gross payment before remittance |

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If you want, I can help you check the exact DTAA provisions or draft a formal query for tax authorities. Would you like that?

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