Raising invoice by NRI person in Indian INR

Invoicing and Payment for Services Rendered by NRI -

*Invoicing in INR*: Y can raise invoices in India in Indian Rupees (INR) for services rendered in Dubai. -

*Payment in INR*: X can make payments to Y in INR, but it's essential to comply with Foreign Exchange Management Act (FEMA) regulations.

Tax Deduction at Source (TDS) - *Section 195*: Since Y is an NRI, TDS under Section 195 of the Income-tax Act, 1961, would be applicable on the payment made by X to Y. -

 *Rate of TDS*: The rate of TDS would depend on the nature of income and the applicable tax treaty between India and the UAE. -

*DTAA benefits*: If the services qualify as "fees for technical services" under the India-UAE DTAA, the rate of TDS might be lower.

Compliance Requirements - *PAN*: Since Y holds an Indian PAN, X would need to deduct TDS and deposit it into the government account. -

*Filing of TDS return*: X would need to file a TDS return and issue a TDS certificate . -

 *Determine the nature of income*: Determine the nature of income (e.g., fees for technical services) to apply the correct TDS rate. -

*Verify DTAA benefits*: Verify if DTAA benefits can be availed, and if so, ensure compliance with the required documentation and procedures. By following these guidelines, X can ensure compliance with tax laws and regulations when making payments to Y.