DEDUCTION OF TAX ON PAYMENTS MADE TO FOREIGN ENTERPRISE

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An Indian Company needs to make payment to a Company in Singapore which does not have any permanent establishment in india for Membership Fees & for Participation in Conference.

I need to know whether tax on the above payments should be deducted or not.?

pls help friends.
 

Replies (4)

S, the amount charged by the foreign company is subject to TDS U/s 195

 

Income deemed to accrue or arise in India. Sec 9

 

Explanation.—For the removal of doubts, it is hereby declared that for the purposes of this section, income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) and shall be included in the total income of the non-resident, 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

 

 

Clause (vii)

income by way of fees for technical services payable by—

                                (a)           the Government ; or

(b)           a person who is a resident, except where the fees are payable in respect of services utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or

(c)           a person who is a non-resident, where the fees are payable in respect of services utilised in a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India :


 

But the Conference was held in singapore and no such services were rendered in India and also the recipient company has no business connection with the remitter..


Dear Kalpesh, i think if the services of the company received outside India are not subject to TDS, such income is outside of the purview of income accrued or arised in India i guess.

ok. thank you so much..

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