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NRI TDS deduction

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Priya Sharma

Company Secretary & Student.MBA

558 Points Posted on 01 October 2009

An Indian Company is making payments to an entity incorporated outside India for dispalying its advertsiements on foreign net, ie.it has purchased some space from that company for displaying its advertisements on foreign net abroad.

So my ques is when the Indian Company will be making payment to outside party will it be reuired to deduct TDS on the same and pay remaining ?

Plz suggest its urgent

Rgds

Priya

Replies (1)

Rajeev

www.rkmco.com

952 Points Posted on 01 October 2009

Priya ,

Since the receipient is outside india , he advertises outside india , no part of his income is deemed to be accrued in india . I think Sec 5 is not attracted . Sec 195 read with sec 5 is also not attracted . TDS not to be deducted , since no part of his income is deemed to accrue in india .

Read Circular no 786 dated feb 2000 , for export agents , and earlier circular no 23 dated 1969 . I think TDS shouldnt be deducted on any NRI payment unless the income is deemed to accrue in india --senior opinion needed

EG : If i pay google "x" dollars to advertise my product in latin america and europe . I dont think google is liable to pay tax on that amount in india , how can TDS be deducted , under what pretext ?