Tds on foreign payment (reimbursement of expenses)

This query is : Resolved

samarjit panda (Querist)
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09 August 2013 Dear Experts,
Please guide for following points.
1-Our company is a french MNC. Our holding company has deputed some EXPATS in India for which they are working in India under payroll of France.
2-Ther are working here in India and having PAN NO.
3-Ther are getting some Indian Salary here in India and Salary in Home currency in France.
4-We have computed their Income Tax for both Indian Salary also for French Salary and discharged the tax u/s 192.
5-Our Holding Company is raising bills on quarterly basis with no Mark-up.

Please guide whether TDS U/s 195 is to be deducted while payment made to France company.

CA Guru M

CA Guru M (Expert)
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09 August 2013 Dear Samarjit,

The criteria to attract tax u/s 195 is that the nature of payment should be income.

Since reimbursment of salary expenses is not an income to Holding company TDS u/s 195 will not be applicable.

Regards.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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28 October 2013 There are divergent decisions on the said topic, however I personally feel that we should not deduct TDS on the same.

Anuj
femaquery@gmail.com

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