Tds under section 195

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Sushant Mahajan (Querist)
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28 August 2013 If an Indian company is using services of a USA company to get its Foreign Receipts realized into Indian Currency received from the Foreign Client in USA.

Will TDS be liable to be deducted on such commission charged by the USA based company for services provided?

Please reply.

Ajay Mishra

Ajay Mishra (Expert)
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28 August 2013

Go to the following link:

https://www.caclubindia.com/experts/tds-under-section-195--1423534.asp

Sushant Mahajan

Sushant Mahajan (Querist)
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28 August 2013 Sir

In my case the Indian Co. won't be paying any money separately for services.

The USA client will pay the amount in dollars to the company that will give us service of currency conversion. The said company will deduct its commission from the total amount received and remit the Indian co. the balance amount.

What would be done in such a case?

Ajay Mishra

Ajay Mishra (Expert)
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29 August 2013 Hi

As per Your question, you have appointed a US company for converting foreign exchange into Indian Currency of our client situated at USA. So actually u are taking service of US co for which you are going to pay.

The second point in your query is that, your US co already deducting amount of commission from total amount of foreign currency received. So, confirm that this commission is the only payment of US Company as a hiring charges.

So as per my understanding, you will get the certificate from such US party about the total amount of commission and deduct tax, if applicable under section 195 of IT ACT.

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