TDS

Is TDS required to be deducted when commission is paid to a non-resident? Please state reasons.

Replies (3)

Mr.Souvik Kumar Ghosh

First of all you have to determine whether any incme is accrued to the non-residnet on payment of commission to him as per the provisions of section 9(1)(i).

If the answer is YES you have to deduct the tax at source and if the answer is NO you need not.

Best Wishes

Sathikonda 

non residenat are provide service outside india , if there is export commission then is exempt as per circular 23 dated 23/07/1969 it is clerify that no part of incom4e arises in india ,since the payment are directly remitted aboread & not any ageant of india such commission is not taxable in india

if accured in india then it is taxable

Mr.Valji

CBDT has withdrawn the circular No.23 dated 23-07-1969, Circular No.163 dated 29-05-1975 and Circular No.786 dated 7-02-2000 by issuing Circular No.7/2009.

The Circulars withdrawn were explanatory circulars.

Hence taxability of such commission will be determined with reference to leval provisins of the Income-tax Act and also the judicial pronouncements.

Please refer the following case laws.

[1980] 125 ITR 525 CIT Vs. Toshuku Ltd., and

[2009] 183 Taxman 92 In Re Spahi Projects (P) Ltd.,

Best wishes

Sathikonda

I am herewith attaching the Circular No.7/2009.

Best Wishes

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