According to Sec 195, Tax should be deducted only if such Income is taxable in India.

In the given case, though the payment is Income to the organization, it may not be taxable (please check residential status of the organization) in the hands of the organization and TDS may not be applicable.

If the said income is taxable in India, refer DTAA and deduct tax accordingly.

As Per section 195 All payments made to non resident is subject to TDS  only if it is required to be deducted on sums chargeable to tax in India under the Income-tax Act [Circular No. 786 dated 7th February, 2000..] except those are cover under chapter XII & XIIA because these payment are TDS under section 196B,196C & 196D......

          Further all payment other than those cover by chapter XII & XIIA are TDS at actual rate of tax (i.e rate prescribed in relevant finance act+ SC+EC OR DTAA) & not ad-hoc rate which is normally used in TDS to resident

any payment other than salary which attract TDS u/s 192 and other than those payment which covered by section 194B/ 194BB/ 194E if made to Non resident then it would also taxed under same section and not under section 195 because under all above section TDS ate deducted at actual rate and not ad-hoc rate.

Non-residents making payments to non-residents are liable to TDS if the payments are chargeable to tax in India (228 ITR 487-AAR).

Click below to Read WIRC ref manual

https://wirc-icai.org/wirc_referencer/income%20tax%20&%20wealth%20tax/Tds%20on%20Payment%20to%20Non-resident%20us-195.htm

  CONCLUSION:

 In given case nonresident (cousin) making payment to nonresident (foreign co) therefore it is liable to TDS since the payments are chargeable to tax in India. (Income accrued in India)

Thanx Vipul..same answer i given before please check it and correct me if i m wrong.

...thanx for participting

I agree with Vipul.

But kindly study DTAA between India and US before deducting tax.

As per DTAA, If the nature of transaction of receipient is business income, then Tax should be deducted only in the receipient has permanent Establishment India. Otherwise taxable in US and not taxable in India.

Originally posted by : vipul patil
	As Per section 195 All payments made to non resident is subject to TDS  only if it is required to be deducted on sums chargeable to tax in India under the Income-tax Act [Circular No. 786 dated 7th February, 2000..] except those are cover under chapter XII & XIIA because these payment are TDS under section 196B,196C & 196D......           Further all payment other than those cover by chapter XII & XIIA are TDS at actual rate of tax (i.e rate prescribed in relevant finance act+ SC+EC OR DTAA) & not ad-hoc rate which is normally used in TDS to resident any payment other than salary which attract TDS u/s 192 and other than those payment which covered by section 194B/ 194BB/ 194E if made to Non resident then it would also taxed under same section and not under section 195 because under all above section TDS ate deducted at actual rate and not ad-hoc rate. Non-residents making payments to non-residents are liable to TDS if the payments are chargeable to tax in India (228 ITR 487-AAR). Click below to Read WIRC ref manual https://wirc-icai.org/wirc_referencer/income%20tax%20&%20wealth%20tax/Tds%20on%20Payment%20to%20Non-resident%20us-195.htm   CONCLUSION:  In given case nonresident (cousin) making payment to nonresident (foreign co) therefore it is liable to TDS since the payments are chargeable to tax in India. (Income accrued in India)

I am not able to understand that How this transaction is taxable under the Income Tax Act,1961?

since the INcome deemed to accrue in india

following is extract of bare Act

³⁵9.   ³⁶(1) The following incomes shall be deemed³⁷ to accrue or arise in India:—

          ³⁸(i)   all income accruing or arising, whether directly or indirectly, through or from any business connection³⁹ in India, or through or from any property³⁹ in India, or through or from any asset or source of income in India, ⁴⁰[* * *] or through the transfer of a capital asset situate in India.

LINK

https://law.incometaxindia.gov.in/dittaxmann/incometaxacts/2005itact/section9.htm

The Seminar Busness is not carried out in India & deemed to accrue in India doesnt depends on the place where you make expenditure 

Finally I agree with Rahul...you perfectly right

Thanx

So rahul you mean that the expenditure for which drectors company has paid will be exempt from tax irrespective of any limit ? or irrespective of to whom the companny has paid? does it required any documentation to prove that the nature of payment is business expenditure for which directors cousin has already paid? what if cousin had not paid anything but indian company has paid it to foreign company ?

Sorry to put up so many question.. i think your answer to these questions will clear it all...

Sorry for earlier opinion.

As per Sec 9(1) income is taxable only if the organization has business connection in India, and such income is earned through such business connection.

So, in the present case there is no business connection through which the organization generated the income.

So income is not Taxable in India. TDS is not applicable.

[For sec 9(1) refer Mr.Vipul Patil reply to this queiry]

Originally posted by : CA CS Prakash Somani (A helpin
	So rahul you mean that the expenditure for which drectors company has paid will be exempt from tax irrespective of any limit ? or irrespective of to whom the companny has paid? does it required any documentation to prove that the nature of payment is business expenditure for which directors cousin has already paid? what if cousin had not paid anything but indian company has paid it to foreign company ?   Sorry to put up so many question.. i think your answer to these questions will clear it all...

First of all dont be sorry.

1. The important thing is the company is incuring a business expenditure &making the payment via intermediary. 

2. The expenditure will be allowed to company whether the payment is made directly or through intermediary.