Income accrue in india or not

if any foreign co is earning income in india through its agents is liavle to pay tax in india or not
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Quick Summary
This discussion clarifies when a foreign company earning income in India through agents is liable for tax. It outlines the criteria for establishing a 'business connection' under Section 9 of the Income Tax Act, including scenarios where agents secure orders, maintain stock, or conclude contracts. Key exceptions are also detailed, such as purchasing goods from India or specific agency, publishing, and film shooting activities. Furthermore, it highlights the potential benefits of international tax treaties and Tax Residency Certificates in reducing or eliminating Indian tax liability.

As per section 9 of Income tax act, There will be a business connection if any non resident has a business outside India but has agent in India who - a) secures orders in India b) maintains stock of goods for delivery of goods c) concludes contract on behalf of non-resident There are following exceptions i.e. income will not be taxable in case of following - a) If such non resident purchase goods from India (even from agent) and there is no other activity b) Non resident has business of running a new agency or of publishing newspapers, magazines or journals (but it should not be sold in India) c) Non resident is doing shooting of cinematography film in India (but it should not be shown in India)
Also, the foreign company can avail benefits under international treaties entered into with the country in which the foreign co. is a resident provided a Tax Residency Certificate has been obtained. This can reduce the taxability of the foreign company in India to lower rates or even to NIL rate of tax.

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