Tds on foreign remittance

TDS 492 views 2 replies

Rohtash

Marketing

26 Points Joined April 2010

Dear Sir,

We have tield up with US Based companyy as their distributor partners in India. We want to remitt them payment for online software, maintenance and training charges. The query is as follows:

a) The company is based in USA and they have Asian HQ at South Korea

b) The billing will be done from south Korea

c) The company has no setup in India

d) We will be buying Online Software, Software Maintenance and Online Software Training from them

What is the TDS payable in the above scenario when we remit payment for purchase of Online Software, Software Maintenance and Online Software Training from them in all the three cases each case?

Replies (2)

J. K. Ratan

Compliance Advisor

794 Points Joined August 2013

Dear Rohtash

As per Section 195 of income tax act 1961 remitter will have to deduct TDS @ 25% on every payment made for downloading software or purchase of software.

Please go through the COSMIC CIRCUIT (P) LTD. V/s ITO 2013 Bangalore passed on downloading software or purchase of software.

Rohtash

Marketing

26 Points Joined April 2010

Dear Sir,

But, I have read somewhere that if India is having DTAA with the country in which the foreign company is having its establishment, then we can avoid the 25% TDS.