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Transaction in foreign currency

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purva jain

71 Points Posted on 30 September 2021

One of my client has taken freelance service in relation to app development from a foreign company (Upwork) provide online freelancing service and made a payment of 700 dollars through credit card without deducting TDS
Kindly guide whether tds applicable or not, if yes what steps should be taken.
Also foreign company is liable for equilisation levy.

Replies (2)

Quick Summary

This discussion explores whether Tax Deducted at Source (TDS) applies to a £700 payment made to a foreign company for app development services via credit card. It also considers the applicability of the Equalisation Levy. While foreign exchange transactions up to £700,000 are generally tax-free, this specific service payment may not fall under that scheme, potentially making TDS applicable.

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 30 September 2021

e.f. October 1, 2020, foreign exchange transactions of up to Rs. 7,00,000 in a financial year are free from tax liability. Amount exceeding Rs. 7,00,000 is liable to TCS (Tax collected at Source) in the hands of the individual at 5% and 0.5% in case of education loan transaction.