Tds on payment to service provider outside of india
NR_london (Director) (24 Points)
02 February 2016NR_london (Director) (24 Points)
02 February 2016
CA Mehul Chudasama
(Chartered Accountant)
(618 Points)
Replied 03 February 2016
No TDS was required to be made because payment of commission are made to non-resident overseas agent. As such no income is arising to the non-resident agent in India. So, no TDS is deductible u/s 194H of the Act, which is applicable for resident Indians only, even the provisions of section 195 is not applicable as payments are made to non-resident overseas agents for the services rendered outside India.
ACIT Vs Nidhi Export (ITAT - Delhi)
Ashish Bansal
(CA)
(1036 Points)
Replied 12 February 2016
When the IT and Marketing services are provided outside india, the income of that Non Resident will not be treated as earned in India. Therefore applicability of Section 195 (Payment to Non Resident) will not be there. Payment would also be made in Forex.
You may go ahead for making such payments without any deduction of TDS. But, you should keep sufficient records (i.e. Agreement / contract) with you to justify that payments made was for and on account of that Agreement / contract.
You may also need to provide such documents to you CA for issuing you Form 15CB and for submission of Form 15CA to Income Tax Department.