Foreign Remittance

This query is : Resolved

Aditya Maheshwari (Querist)
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23 November 2009 A company in India is making payment to a firm in USA for business development and other related activities in USA and the firm does not have any office in India.

So whether such income of the Firm is liable to tax in India and whether the same is liable for Tax Deduction at Source. If the same is liable for TDS then at which rate.

In my opinion the same should not be liable for tax as there is no business connection nor any PE in India and the service is being provided in USA.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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23 November 2009 If the payment is for the purchase of product then tds will not come. If the payment is for the service then you have to check DTAA and check for the article under which this payment fits then you have to deduct tds at that rate, if nothing is mentioned then you have to apply section 195 of the income tax act and tds has to be deducted as per that section.