Tds u/s 195

Save Share

This query is : Resolved

Sandeep Jain (Querist)

07 April 2012 Dear Sir,
Whether TDS is applicable for reimbursement of expenses like communication,bandwidth charges, software maintenance charges, freight etc to a foreign holding company? This is purely a reimbursement of expense and no profit as such is added by holding company. This is reimbursement to a US holding company. If Tds to be deducted, what is the rate of deduction? Please answer ASAP.. It is urgent..

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

07 April 2012 Dear Sandeep,

If the foreign holding company proves it as reimbursement of expenses from the subsidiary company and all the relevant expenditure incurred at first instance by foreign holding company are debited to the subsidiary company then TDS u/s 195 is not applicable.

TDS U/s 195 is applicable only if it is income chargeable in India since it is not the income of the foreign holding company then there is no need to deduct the TDS.
It is pertinent to note that the foreign company proves that such expenses are incurred on behalf of subsidiary and provides necessary documents to substantiate the expenses incurred.

Message likes : 1 times

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now