TDS on Salary From USA

TDS / TCS 1108 views 4 replies

abhishek

32 Points Posted on 28 December 2009

Dear All,

Happy New year

I just want to know that if a Comapny incorporated in USA, engage any employee in India to do its back office work. should it deduct the TDS on salary paid to the employee in india

if yes , What is procedure for that ?

should the company is liable to file it return in india as the company has no income connection in or from india?

Thanks

Replies (4)

@ CA. $ahar$h @

Student

338 Points Posted on 29 December 2009

Dear abhi,

The incidence of tds arises on the part of payee. So, the company will check in the tax laws of USA that whether tds is to be deducted or not. Further if u r receiving the salary in India, it will be taxable in ur hand and further u will get the relief of the tax deducted at source by the company as per the double tax avoidance agreement.

Shudhanshu Agrawal

Business

2570 Points Posted on 29 December 2009

I think question needs more clarification as one place you are saying that company doesnt have any business connection in India and second place you are saying that it is paying salary to an Indian employee in India. Moreover Tax laws of USA and DTAA willbe applicable as company is reqistered in USA.

abhishek

32 Points Posted on 29 December 2009

Originally posted by : Shudhanshu

Please find attached the fact of the case as below

1Company is registered in USA

2 It Does not have any business income from india

3 it simply transfer its backoffice work in india

4 it employed the people in india to do back office work

5 should company go for Having PAN And TAN no. In India to deduct the tax as per indian Income tax law

Shudhanshu Agrawal

Business

2570 Points Posted on 29 December 2009

Mr. Abhishek,

According to me it will become the case of Liaison office as for all these expenses you need to receive funds from USA and as you said it doesnt have any income generation in India so they can set up a liaison office in India. As you must be knowing that liaison office are not allowed to perform any business activities but they are the medium of communication only.