Tds on export of consultancy services

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Querist : Anonymous

Querist : Anonymous (Querist)

27 May 2013 Hi All,

Kindly let me know if TDS is applicable on export of consultancy services??

Thnaks in advance

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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17 June 2013 While export the payment received by you (In India), where is the TDS question here.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 For **export of consultancy services**, here’s how TDS works:

### 1. **Is TDS applicable on export of consultancy services?**

* **No TDS is applicable on export of consultancy services** if payment is received **from a foreign entity** outside India.
* TDS under Indian Income Tax Act applies on payments made **within India** or to a **resident** or **non-resident** if the income is deemed to accrue or arise in India.

### 2. **When is TDS applicable?**

* If the **consultancy services are provided by an Indian resident to a foreign client**, the **income is received from outside India**.
* Since this is **export of services**, no TDS is deductible by the foreign client outside India.
* The Indian service provider **does not deduct TDS on their own export earnings**.

### 3. **Section 195 & export services**

* Under **Section 195**, TDS applies on payments to non-residents if the income accrues or arises in India or is deemed to accrue.
* But since the **exporter is Indian resident** receiving foreign currency, **TDS is not applicable on such export receipts**.

### 4. **Summary**

| Situation | TDS Applicability | Comments |
| ------------------------------------------------ | ------------------------- | ----------------------------------------- |
| Export of consultancy services to foreign client | No TDS deduction required | Export income, no tax deduction at source |

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### **Note**:

* The exporter must comply with **GST** and **foreign exchange regulations**.
* TDS may apply on any **domestic payments** related to the consultancy services, but not on export receipts.

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If you want details on documentation or compliance for export of consultancy, feel free to ask!

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