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Please help regarding section 195

03 October 2012

SOME OF OUR COMPANIES EMPLOYEE GOES OUT OF INDIA FOR TRAINING PURPOSE.THEY RESIDE IN A HOTEL .HOTEL ARRANGE FOR FOODING LODGING OF OUR EMPLOYEE AND RAISED BILLS ON OUR COMPANY IN INDIA.NOW MY QUESTION IS THAT SHOULD WE DEDUCT TDS WHILE REMITTING PAYMENT FROM INDIA TO THAT HOTEL?

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6 Replies

CA Sanjay Bag (CHARTERED ACCOUNTANT) (3340 Points)
Replied 03 October 2012

Yes, you have to deduct the tax at source before payment.

CA.Ankur Khandelwal (Owner) (281 Points)
Replied 03 October 2012

apart from the Bill of Hotel you have to pay tds extra on the same

CA. Anuj Gupta (Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA) (7014 Points)
Replied 03 October 2012

No tds is required to be deducted , provided you obtain TRC- Tax Residency Certificate and No PE certificate from the Hotel. Anuj femaquery @ gmail.com

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ALOK KUMAR JHA (STAFF) (74 Points)
Replied 03 October 2012

ACTUALLY AS PER MY UNDERSTANDING TDS WILL BE DEDUCTED ON THOSE INCOME OF NON RESIDENT WHICH IS TAXABLE IN INDIA BUT IN THIS CASE HOTEL SERVICE IS GIVEN OUT OF INDIA ,ONLY BILL RAISED IN INDIA AND PAYMENT GIVEN BY OUR COMPANY FROM INDIA.NOW CAN THIS PAYMENT WILL BE TREATED AS RECEIVED FROM INDIA FOR THAT NON RESIDENT ,IF YES THEN AS PER MY UNDERSTANDING T.D.S WILL BE DEDUCTED.IS NEW AMENDMENT IN SECTION 9 AFFECTING THIS ALSO.PLEASE SUGGEST.THANKS IN ADVANCE.

ALOK KUMAR JHA (STAFF) (74 Points)
Replied 03 October 2012

CA. Anuj Gupta (Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA) (7014 Points)
Replied 05 October 2012

First the exact Income Head under which the Income is being reived by the Foreign Hotel needs to be understood. The same is Business Income in the present case.

Just read article 7 of the DTAA between India and the foreign Country in which hotel is situated.

Anuj

femaquery @ gmail.com