Tds on fees paid to non resident

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Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2014 If an indian company pays fees to advocate outside india for suit filed outside india is TDS on same applicable..??

Amol S Joglekar

Amol S Joglekar (Expert)
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21 November 2014 Yes, TDS to be deducted u/s 195

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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21 November 2014 This is a fees paid to Advocate outside India for services rendered outside India hence no TDS applicable.

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Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2014 Thanks for rep but section 9 is bit confusing if service rendered is though outside india but for indian company is it deemed accrual of income for advocate?? please clear my doubts any rep appreciated.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 November 2014 Please see the following case laws which will support my view.

Prasad Productions case

A special bench of the Chennai tribunal ruled that tax needs to be withheld only on payments made overseas that are taxable in the hands of the non-resident. However, that ruling is contradictory to the Karnataka High Court decision in the Samsung case, which said that every overseas remittance had to withhold tax unless it had a nil withholding order from the Revenue Department.

The Chennai Tribunal, however, further observed that it is up to the taxpayer to decide whether a transaction is taxable. If not there is no need for a nil withholding order.

Van Oord case

In this case, the Delhi High Court ruled that withholding taxes apply only to payments that are taxable in India.

Services rendered by non resident outside India is not taxable in India.

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