Ttddss
This query is : Resolved
09 May 2012
XYZ IS FOREIGN COMPANY REGISTERED OUTSIDE INDIA .IT GIVES SERVICE TO ABS COMPANY (INDIAN COMPANY), THERE WAS A BILL OF RS. 100000/- SO WHETHER PAYMENT IS MADE AFTER DEDUCTING TDS OR NOT???
Vishal D Shah
(Expert)
10 May 2012
Incomplete details dear. It is not as simple as written by you...
10 May 2012
XYZ IS FOREIGN COMPANY REGISTERED OUTSIDE INDIA . IT GIVES SERVICE OF ADVERTISEMENT IN FOREIGN COMPANY TO INDIA COMPANY. IT GIVES A BILL OF RS. 100012/- TO INDIAN COMPANY. SO INDIAN COMPANY HAVE TO MAKE PAYMENT AFTER DEDUCTING TDS OR NOT??
Vishal D Shah
(Expert)
10 May 2012
I think there is error in writing country instead of company in 2nd line. Advt services are provided in foreign country. pl clarify. whether foreign co has PE in India?Also let me know the name of country of beneficiary and where the services are provided as DTAA has a role to play here.
It is taxable under Indian income tax act though. Hence there are many things which needs to be looked into. Advisable to take proper professional help...
cavishalshah@gmail.com
It is taxable under Indian income tax act though. Hence there are many things which needs to be looked into. Advisable to take proper professional help...
cavishalshah@gmail.com
19 February 2014
CAN EXCISE DEPARTMENT CONDONEDELAY IN SUBMISSION OF PRROF OF EXPORT (a.r.e 1)in case of removal of goods to SEZ units.
02 August 2025
Here’s a quick rundown for your query about TDS on payments to foreign companies for services like advertisement:
---
### Payment to Foreign Company for Advertisement Services
1. **Is TDS applicable on payment to foreign company?**
* **Yes, TDS is generally applicable on payments to non-resident entities for services rendered, under Section 195 of the Income Tax Act.**
2. **But key factors to consider:**
* **Where are the services actually rendered?**
In your case, if the foreign company provides advertisement services **outside India** (not in India), then the payment may **not be taxable in India**.
* **Does the foreign company have a Permanent Establishment (PE) in India?**
If **no PE in India**, and services provided entirely outside India, Indian company may **not need to deduct TDS**.
* **Double Tax Avoidance Agreement (DTAA):**
India has tax treaties with many countries which may exempt or reduce TDS rates or taxability.
---
### Practical Steps:
* Check if foreign company has PE in India.
* Determine place of provision of service.
* Check relevant DTAA provisions for the foreign company’s country.
* If taxable in India, deduct TDS under **Section 195** at appropriate rate.
---
### Example:
| Situation | TDS Required? |
| ----------------------------------------------- | ----------------------------- |
| Services provided entirely outside India, no PE | Usually **No** |
| Services provided in India, or PE present | **Yes**, deduct under Sec 195 |
---
**Note:** This is a complex area; I recommend consulting a tax professional with all facts to avoid penalties.
---
If you want, I can help you draft a checklist of information to gather before deciding on TDS for foreign payments. Would you like that?
---
### Payment to Foreign Company for Advertisement Services
1. **Is TDS applicable on payment to foreign company?**
* **Yes, TDS is generally applicable on payments to non-resident entities for services rendered, under Section 195 of the Income Tax Act.**
2. **But key factors to consider:**
* **Where are the services actually rendered?**
In your case, if the foreign company provides advertisement services **outside India** (not in India), then the payment may **not be taxable in India**.
* **Does the foreign company have a Permanent Establishment (PE) in India?**
If **no PE in India**, and services provided entirely outside India, Indian company may **not need to deduct TDS**.
* **Double Tax Avoidance Agreement (DTAA):**
India has tax treaties with many countries which may exempt or reduce TDS rates or taxability.
---
### Practical Steps:
* Check if foreign company has PE in India.
* Determine place of provision of service.
* Check relevant DTAA provisions for the foreign company’s country.
* If taxable in India, deduct TDS under **Section 195** at appropriate rate.
---
### Example:
| Situation | TDS Required? |
| ----------------------------------------------- | ----------------------------- |
| Services provided entirely outside India, no PE | Usually **No** |
| Services provided in India, or PE present | **Yes**, deduct under Sec 195 |
---
**Note:** This is a complex area; I recommend consulting a tax professional with all facts to avoid penalties.
---
If you want, I can help you draft a checklist of information to gather before deciding on TDS for foreign payments. Would you like that?
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