30 June 2023
Hi, I am a salaried Indian Resident and want to appear for the PMP certification examination held by PMI Institute USA. The examination fee is 405 US $ and the membership fee is 149 US $. While making the payment to PMI for the above-said certification examination the PMI institute is charging me 99.72 US $ as TAX, which is exactly 18% (GST %) of the total amount payable i.e. 554 US $. Please advise on the following : 1. Is TAX applicable for examination fees and membership fees also? If not, then how can I claim the paid TAX amount? 2. If I make the payment can I claim an income tax deduction while filing income tax returns for the FY 2023-24?
11 July 2024
Based on the details you've provided regarding the PMP certification examination fees and taxes, here are the responses to your queries:
### 1. Applicability of Tax (GST) on PMI Fees:
- **Examination Fees and Membership Fees:** - Generally, services provided by foreign entities like the PMI (Project Management Institute) to residents of India are subject to Goods and Services Tax (GST) under the reverse charge mechanism. - The GST rate applicable for such services is 18%, which aligns with the amount you mentioned being charged as tax (99.72 US $ on a total of 554 US $).
- **Claiming Input Tax Credit (ITC):** - As an individual paying GST under the reverse charge mechanism, you can claim input tax credit (ITC) for the GST paid on services from PMI against your GST liability, if you are registered under GST in India and it's applicable to your circumstances. - Since you are a salaried individual, you might not be registered under GST. Therefore, you typically cannot claim ITC directly.
### 2. Income Tax Deduction:
- **Claiming as Business Expense:** - Since you are not paying this expense in the course of business or profession (it's for personal certification), you cannot claim it as a business expense. - The fees for professional certification courses or exams are generally not deductible under the Income Tax Act unless they are directly related to your profession or employment and incurred for the purpose of earning income.
- **Tax Deduction under Section 80C:** - The payment towards examination fees and membership fees for professional bodies like PMI does not qualify for deduction under Section 80C of the Income Tax Act, as these are not investments in specified instruments eligible for deduction under this section.
### Conclusion:
- **GST Applicability:** The GST charged by PMI (18%) on the examination and membership fees is correct under Indian tax laws for services provided by foreign entities.
- **Input Tax Credit:** You may not be able to claim input tax credit (ITC) as an individual unless you are registered under GST and the payment is in the course or furtherance of your business.
- **Income Tax Deduction:** You cannot claim a tax deduction under Section 80C for the PMP examination and membership fees unless you can demonstrate that it is directly related to your employment and necessary for your profession.
For specific advice tailored to your personal tax situation, it is recommended to consult with a qualified tax advisor or chartered accountant who can provide guidance based on detailed information about your income and taxes.
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