26 June 2009
AN INDIAN CO PAID COMMISSION IN FOREIGN CURRENCY TO A FOREIGN CO,FOR HELPING IN SECURING ORDERS FOR SALE OF GOODS OUTSIDE INDIA, WHETHER TDS TO BE DEDUCTED ON SUCH PAYMENT.
27 June 2009
Kindly refer to circular No:23 dated 23.01.1969 and 786 dated 07.02.2000, it is given that where non-resident agent operate outside India, no part of his income arises in India. Such commission is remitted directly abroad, it cannot be held to have been received by or on behalf of the agent in India, therefore held to be non-taxable in India. Hence No tax is deductible U/s 195.
13 August 2009
Respected Bharat Ji Thank you for your kind input, but in such case a question arrises whether to treat such income of the agent as indian income or not as the foreign agent is in contract with the indian party,and such commission is paid to him in pursuance to such contract. rest for your input.
CAclubindia
