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Urgent - tds in case of non resident payment

CA SUKSHAM ARORA (CA) (569 Points)

18 March 2014

PLEASE TELL ME IF TDS IS DEDUCTABLE IN CASE A PERSON MAKES A PAYMENT TO NON RESIDENT (U/S 195) WHOSE ACCOUNTS ARE NOT REQUIRED TO BE AUDITED U/S 44AB

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15 Replies

Anjan (Chartered Accountant) (69 Points)
Replied 18 March 2014

Hi Suksham,

Under Section 195 of Income Tax Act, TDS is to be deductable in case of the payment to Non-resident even if the payer accounts is not required to be auidited u/s 44AB

CA SUKSHAM ARORA (CA) (569 Points)
Replied 18 March 2014

are you sure ????

can u please provide me the source?

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 18 March 2014

Dear

Please consider the attachment below.

Analyse it with your case. (i mean what type of payment your going to do and the nature of payment...)

regards

Attached File : 164890 1298403 sec195 with cases .pdf downloaded: 202 times

CA SUKSHAM ARORA (CA) (569 Points)
Replied 18 March 2014

I AM NOT SURE BUT I GUESS TDS BY INDIVIDUAL IS DEDUCTIBLE ONLY IN CASE OF AUDIT REQUIREMENT U/S 44AB...ISN'T IT SO

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 18 March 2014

Now tell us what type of payment your going to do and the amount??

it says "Any person"- as defined u/s 2(31) is responsible to deduct tax

Regards

CA SUKSHAM ARORA (CA) (569 Points)
Replied 18 March 2014

COMMISSION

RAHUL GOYAL (tax consultant) (46 Points)
Replied 18 March 2014

Dear Suksham,

I think Manoj is correct..you will have to see what type of payment you are going to pay to NR...it is immaterial whether the payer's accounts are audited or not........

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 18 March 2014

Dear

I always suggest people to stand on safer side by deducting TDS in case of NRIs. and in your case you should deduct TDS.

Regards

CA SUKSHAM ARORA (CA) (569 Points)
Replied 18 March 2014

DO YOU THINK THAT THE PROVISION OF TDS TO BE DEDUCTED BY AN INDIVIDUAL IN CASE HIS BOOKS ARE AUDITTED NOT APPLICABLE ON NRI

RAHUL GOYAL (tax consultant) (46 Points)
Replied 18 March 2014

commission paid to Non Resident Agent if it is remitted directly to that foreign Agent......then No TDS would required to be deducted.....CBDT circular 23 dated 23 July 1969......

otherwise if you have any doubt then an application can be given to A.O. for asking about the taxability of such payment of commission to NR.....

CA SUKSHAM ARORA (CA) (569 Points)
Replied 18 March 2014

but according to me this circular has been withdrawn

C.A.SUNIL HUKKERI (CHARTERED ACCOUNTANT) (58 Points)
Replied 18 March 2014

TDS is not required to be deducted in case of non applicability of tax audit U/S 44AB. but this is applicable only in case of 194A, 194C, 194H, 194I & 194J. Section 195 is not covered here therefore seems TDS to be deducted.

k.v.satyanarayana (articleship) (27 Points)
Replied 18 March 2014

Not required to deduct tds if submit form 15CA, 15 CB , Then 0% tds.

vishal (Job) (91 Points)
Replied 19 March 2014

Dear

From the above discussions, i would like to add that the section 195 are separate section from other TDS sections.

In section 195 it is clearly written that any person responsible for payment to non resident... here words are any person.

Further taxability of NR is depending upon the income earned or deemed to earned in india as per section 5(2).

Also refer section 9 - Income deemed to accure or arise in india.

In above given case of commission , it is my person opinion that

if service provider does not have any PE in india and services are provided outside india. the no income is arise/accure/earmed in india or deemed to earn in india.. so no WHT applicable.