Tax deduction from foreign national

What is the rule regarding tax tax deduction at source from a foreign national who is working as a contractor in a company in India on the the basis of monthly remuneration.

Replies (5)

No reply from any one??? Please post your replies friends'...

Contractor on monthly remuneration? Well you should decide whether the person is getting salary or payment for contract (basically you need to decide whether it is "contract of service" or "contract for service". If it is salary, deduct TDS under Section 192, if it is other payment deduct tax under Section 195. 

Thanks Rajesh for your reply .

we are treating the same as TDS under sec 195. As per his agreement he is getting a fixed amount on monthly basis and taxes are borne by the company. He is raising his bill after adding back 33.99%. in this case company is paying some excess tax on his account and he is getting the same as refund from income tax department. Can we ask him to repay the amount of refund from IT department, as he is not bearing any tax and refund is coming only because of excess tax payment by the company or is there any rule to set off the amount of refunds of past years from the current years tax liability  ??

Thanks Nice ques nd nice anser.....i realy didnt k9 this..........

THANKS

Expecting replies from some more tax experts...

:-)

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