Tds on export of consultancy services
This query is : Resolved
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
Kindly let me know if TDS is applicable on export of consultancy services??
Thnaks in advance
CMA Ramesh Krishnan
(Expert)
17 June 2013
While export the payment received by you (In India), where is the TDS question here.
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 |
---
### **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.
---
If you want details on documentation or compliance for export of consultancy, feel free to ask!
### 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 |
---
### **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.
---
If you want details on documentation or compliance for export of consultancy, feel free to ask!
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