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TDS against payments covered by section 172

K R DHAWAN (profession) (30 Points)

04 March 2021

Whether any document is required to be obtained from indian agent of foreign shipping lines for not deducting tds against payments made to them towards occean freight etc. as those are covered under section 172 of Income Tax Act.

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Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 05 March 2021

Hello Dhawan,

Since it is self explanatory under circular No. 723-Income Tax Dated 19-9-1995 that TDS either u/s 194C or 195 would not be applicable. However due to complexity under TDS provisions, you can take self-declaration from Indian agent of foreign shipping line that section 172 applicable to them and they have paid taxes in compliance of provisions of section 172 of the Income Tax Act alongwith indemnity clause thereto. Since no specific document as such has been prescribed under income tax act in the given case, we need to use our judgement to satisfy AO on rationale behind non deduction of TDS u/s 194C/195

Regards,

Manoj