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Tds on sponsorship

CA.Varalakshmi.M (Manager-Finance) (482 Points)

02 January 2013

Hello Friends,

Happy new year .

SAP Company in Singapore conducting a seminar in Singapore ,we are an Indian company Sponsoring the event.

I would like to know ,if TDS is applicable to this transaction?

If applicable please educate me wrt to Section.

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4 Replies

CA. RUPESH JOSHI (Chartered Accountant) (174 Points)
Replied 02 January 2013

Sponsorship is an activity which is in the nature of Advertisement and in case of domestic payments TDS is required to be deducted under section 194C.

2 Like

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 02 January 2013

You need to verify the DTAA between India and Singapore under section 90,91 read with section 195 and finalise the withholding tax rate, if any.

If the non resident payee does not have a PAN (most likely) you need to apply double the rate or 20% which is higher.

Regards,

2 Like

CA Surendra Prajapati (Deputy Manager (Finance)) (361 Points)
Replied 02 January 2013

If payment is to be made to a Singapore based company then plz refer to section 195 and DTAA with India and Singapore...there is no provision for taxation of sponsorship fee in DTAA. It should be treated as Business Income of the Singapore based company which is arranging the activiites of seminar and should not be taxed if it does not have any permanent stablishment in India

2 Like

CA Abhishek Sood (ca) (21 Points)
Replied 23 April 2014

Even if the NR does not have a PAN but the remittance is with respect to business profits the same should not be subject to any tax if there is no permamnnent establishment in india of the NR.

But TRC is must for applying DTAA.

DTAA Superceeds 206AA...........