Income Tax on services rendered outside India

Venkatesh (Director) (70 Points)

25 October 2010  


Dear All,


We are providing IT staffs across India and performing services. We got an opportunity to service to an overseas client in Saudi and we plan to send out IT staff there.


1) I want to know, if I raise Invoice should I charge service tax of 10.3% as I do in India or not required 

2) Whether I have to deduct Income-tax from my employees.  I have to pay in dollars for their expenses at saudi ( Food,accommodation & local transport) in USD. How these expenses can be accommodated without tax?

3) Whether my company have to pay Income-tax on the profit out of this transaction ?

Any tips to reduce / avoid taxation as all my receivables are in dollars.

Thanks to all in Advance