TDS rate for pmnt to overseas agent

Dear Ash,

Plz clarify commission for what??since TDS rates are based on type of payments as per DTAA with NEPAL..

Please go Through the circuler issued about non deduction of Tax, However some details required in your case about the transaction for which commission has been given 

Goods were supplied to a governement organization in Nepal and we need to make commission payment to our agents in Nepal. This is there share of the profit on the transaction and also payment which our agent in Nepal will be making towards freight and transportation.

Respected Friend Ash,

It is u/s - 194H ie 10% & 1% Surcharge, Deduct TDS without quoting PAN, otherwise your expenses will not be deducted under IT Act 1961, Also Refer Circular No.619 dated 4.12.1991, Deduct the TDS only on Commission & not on expenses.

Thanks

Debashis 

Dear Ash

There is also some details neeeded like whether there is any contract? where the commission will be paid etc. However Kindly refer the Board circuler no. 786 dt. 2.2.2000. Hope it will clerify. also it is supported by CIT v George Willianson (Assam) Ltd. 2008 305ITR (AT) 422 Gauhati

According to above circuler Where a non resident agents operates outside the country, no part of his income arises in India. Further since the payment is usually remitted directly abroad, it cannot be held to have been received by or on behalf of the agent in India. Such payments are therefore, not taxable in India. Consequently, no tax is deductible at source under section 195 in such case.

Dear Debashis,

For overseas commission payments will we use section 195(i) rather than 194h.

195(i) has TDS rate as 40%  See link below

https://www.taxguru.in/income-tax/post-budget-tds-tcs-rate-chart-and-provisions-applicable-from-01-10-2009.html

It is all very confusing.

Dear Bimal,

we use to make payments u/s 195 in the past and not deduct any TDS.

No longer the case can be as

https://www.taxguru.in/income-tax/all-overseas-payments-are-subject-to-withholding-tax-whether-or-not-the-income-is-taxable-karnataka-high-court.html

Please read the above news.

Dear Ash,

Thanks for Updation of recent judgement. However in our country various High Court has given contratory judgemnt on various issue. No one judgemnt is permanent, issue will going on.