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TDS - Section 195

meenakshi (Audit Manager) (81 Points)

23 January 2008

Hai!

can somebody tell me as to which incomes are covered by section 195 of the income tax act? kindly elaborate the section 195

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19 Replies

S.Srinivasaraghavan (Chief Financial Officer and Co) (11318 Points)
Replied 23 January 2008

Section 195 of Incometax Act (Act) is applicable in respect of payment by a person to a non-resident (NR), not being a company, or to a foreign company. Payment stated as above covered by this section are: 1.Interest 2.Any Sum chargeable under this Act other than Salaries. Obligation to the person paying to such NR: Deduction of tax from the payment at the rates in force. The section gives scope for the person concerned to make application to the authority concerned for deduction at a lower rate or nil rate

(Guest)

As per the decision of Transmission Corporation, any payment to a Non Resident covered u/s 195 requires deduction of tax. Only the Dept is authorised to issue deduction of tax at a lesser rate or the rate other than the one provided u/s 195 or DTAA as the case may be. Hence care should be taken in handling this issue. However if the nature of payment is not in the nature of Income liable for taxation, the person responsible can get over for non deduction.

Irshad (Article) (1426 Points)
Replied 24 January 2008

Useful info

Murali (Finance executive) (28 Points)
Replied 29 May 2008

Is TDS deductible on USD payments to Legal firms located in USA

(Guest)

dear sir

we are transfer fund throught T.T in favour of Prometric a division of thomson learning inc.(5canada square london,E15 5aq)this is an international certification(examination).we have deducted TDS on transfer fund.what is right TDS rate,New tds rate is 15%(royality and fee for technical services)and 20%all other cases.

Prometric officer saying TDS rate 10.3% under section195 agreement between prometric may 2007.

So please guide us the accurate rate of tds deduction in this case, as per notification by the govt of india..

with regards

jagmohan sharma

kamalkumar (Partner) (23 Points)
Replied 20 June 2009

My client is remitting the commission of 2000US $ to Mr A citizen of USA and services rendered outside the India. Pl advise that whether section 195 is applicable ? if yes at what rate ? moreover service tax is applicable for the said transaction.

Anumanchipalli Sathikonda (Tax Consultant) (1349 Points)
Replied 20 June 2009

Mr.Kamal Kumar

Your client need not deduct Tax at Source from the commission being remitted to a commission agent in the USA for services rendered out side India. The CBDT has clarified the matter in Circular No.786 dated 7-2-2000. I am herewith attaching the copy of the said circular. You can find the circular in 241 ITR (St)132.

Attached File : 32 cbdt circular no.786 datted 7-2-2000.doc downloaded: 1401 times

Ashish (Chartered Accountant) (22 Points)
Replied 18 July 2009

Dear Mr.Sathikonda anumanchipalli

Whether the circular 786 is applicable in case of fees for professional / technical fees paid to non residents indian providing service from outside india & remittance in forex?

Regards:

CA Ashish Sheth

Bobby Augustine (Sr.Manager - Operation) (26 Points)
Replied 20 July 2009

Dear Sir

Our client need to send 10000 US dollar to American Express against 10000 US dollar Travellers cheque provided by their agent to the employees of the client for their foreign travel. Do they need to deduct TDS on this, kindly advice.

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 20 July 2009

Please refer TDS chart on this link : >>> TDS Rates for AY 2010-11 (FY 2009-10)

Siddarth (article) (37 Points)
Replied 08 September 2009

Originally posted by :kamalkumar
"	My client is remitting the commission of 2000US $ to Mr A citizen of USA and services rendered outside the India. Pl advise that whether section 195 is applicable ? if yes at what rate ? moreover service tax is applicable for the said transaction.	"

Siddarth (article) (37 Points)
Replied 08 September 2009

A company in India has to make a payment to a person in Iran for the liasoning services to be provided in Iran.

Whether TDS id\s required to be deducted?

chaitanya cherukuri (Articled Student) (241 Points)
Replied 19 May 2010

its not income that is covered under section 195 but every payment except payment made related to Interest on securities and Salaries is covered under section 195. if the payment is not related to income generated in india then the deductor will have to make an application to and get prior permission from assesing officer. the deduction on payment or credit shall be made at rates priscribed by finance act passed every year in the parliament.

Geetha Suresh (senior consultant) (29 Points)
Replied 15 June 2010

Our client has paid server charges billed in USD through credit card for a LLC company in US. Is TDS applicable, if so is it u/s 195 and what is the rate for 2009-10.