Tax (tds) on commission payment

TDS 1747 views 16 replies

Arihanth Jain

Chartered Accountant

1226 Points Joined February 2010

My View:

Non Resident agent (NR) has rendered services related to procurement of export orders abroad and also that such NR did not have any business connection/PE in India.

Such services rendered were not utilised in India and also the commission income of NR was neither received nor accrued in India. As a result, the such commission income is not taxable in India u/s 9(1) and there is no obligation on part of Remitter to deduct any TDS u/s 195. DTAA Article 7 shall exempts this income.

However it is advisable that the NR gets a PAN card in India to avoid issues with Sec 206AA.

Replies (16)

Arihanth Jain

Chartered Accountant

1226 Points Joined February 2010

My View:

Non Resident agent (NR) has rendered services related to procurement of export orders abroad and also that such NR did not have any business connection/PE in India.

However it is advisable that the NR gets a PAN card in India to avoid issues with Sec 206AA.

pankaj birdi

Others

37 Points Joined April 2014

I read some articles and found that there is no need to deduct the TDS on the commission amount. Follow the below links: https://www.business-standard.com/article/sme/commission-paid-to-foreign-agent-of-indian-company-not-taxable-in-india-113042900626_1.html https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/taxnewsflaash/Documents/india-april30-2013no1.pdf kindly correct me if i'm wrong.