TDS on Payment to Foreign Company
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
19 April 2010
Dear all,
I have a quary about deduction of tds on payment to foreign company by domestic company.
The case is,An engineers of a domestic company was taken a technical training from foreign company at outside india and the payment will be made by domestic company from india. Is any tds will be deducted on payment?
If Yes,than what rate? and under which section and clouse??
I have a quary about deduction of tds on payment to foreign company by domestic company.
The case is,An engineers of a domestic company was taken a technical training from foreign company at outside india and the payment will be made by domestic company from india. Is any tds will be deducted on payment?
If Yes,than what rate? and under which section and clouse??
19 April 2010
SINCE THE SERVICE IS RENDERED OUTSIDE INDIA AND AND PAYMENT MADE OUTSIDE INDIA. TDS IS NOT REQUIRED TO BE DEDUCTED.
"Where a non-resident agent operates outside the country, no part of his income arises in India. Since the payment is usually remitted directly abroad, it cannot be held to have been received by or on behalf of the agent in India. Such payments are, therefore, not taxable in India. No tax is, therefore, deductible under section 195. [Circular No. 786 dt.2-7-2000]."
VIEW OF OTHER EXPERTS ALSO SOLICITED.
"Where a non-resident agent operates outside the country, no part of his income arises in India. Since the payment is usually remitted directly abroad, it cannot be held to have been received by or on behalf of the agent in India. Such payments are, therefore, not taxable in India. No tax is, therefore, deductible under section 195. [Circular No. 786 dt.2-7-2000]."
VIEW OF OTHER EXPERTS ALSO SOLICITED.
19 April 2010
But the amendment proposed in the Finance Bill,2010 will negate the above view.
19 April 2010
SIR PLEASE TELL THE INCOME IS RECEIVED OUTSIDE INDIA FOR SERVICES RENDERED OUTSIDE INDIA BY NON RESIDENT. IS THE NON RESIDENT LIABLE TO PAY INCOME TAX IN INDIA?
19 April 2010
Sir
Clause 4 of the Finance Bill,2010 is reproduced below.
The income of a non resident shall be deemed to accrue or arise in India whether or not:-
i) the non resident has a residence or place of business or business connection in India; or
ii) the non resident has rendered services in India.
It is also proposed to give retrospective effect from 1/6/1976 onwards.
Clause 4 of the Finance Bill,2010 is reproduced below.
The income of a non resident shall be deemed to accrue or arise in India whether or not:-
i) the non resident has a residence or place of business or business connection in India; or
ii) the non resident has rendered services in India.
It is also proposed to give retrospective effect from 1/6/1976 onwards.
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