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Tds on foreign company

srikumar (Manager - Accounts) (27 Points)

16 February 2015

We are a manufacturing company in India. We gave advertisement of our company in Foreign Book. Is TDS applicable on this payment? Please help us .

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6 Replies

CA NIHAL JAIN (CA In Practice) (110 Points)
Replied 17 February 2015

Hello Sri Kumar,

You can refer the below mentioned link for your query:

/experts/tds-to-foreign-company-751740.asp#.VOLkhNj9UsM

Arif Ali (Apt Co Advisory) (1230 Points)
Replied 17 February 2015

yes, you have to deduct the TDS

Raphael (Chartered Accountant) (214 Points)
Replied 19 February 2015

Dear Friend,

TDS u/s 195 has to be deducted only in case income accrues or deems to be accruedor arising in India. In your case if the Company does not have a Permenant establishment in India, then TDS will not be applicable as the advertisement income does not accrue or arise in India for the party.

Arif Ali (Apt Co Advisory) (1230 Points)
Replied 19 February 2015

Originally posted by : Raphael
	Dear Friend, TDS u/s 195 has to be deducted only in case income accrues or deems to be accruedor arising in India. In your case if the Company does not have a Permenant establishment in India, then TDS will not be applicable as the advertisement income does not accrue or arise in India for the party.

Hi Raphel, In this case foreign company is received payment from India. So it would be taxable in India. hence accordingly TDS u/s 195 would be applied.

can you please explain on your answered.

CA Rohit Gupta (Partner) (1982 Points)
Replied 27 February 2015

TDS is not applicable. As it will fall under Article 7 as business profits. You can claim exemption under DTAA of respective country and pay without deducting TDS.

thanks

rohit