We are manufacturer of any item in India and exporting goods outside India to various parties as under through an agent e.g. MR.X who is a foreigner, We are paying Commission to Mr.X for Sales done to various parties in India and abroad.
What is the rate of TDS for commission paid to such agent ?
Whether we can pay Foreign Currency as commission to Mr.X ? How?
If there is no TDS on Commission paid to Foreign agent as per Income tax circular no 786 dtd 07-02-2000
Any threshold limit of percentage of commission for paying to foreign agent ?
or
Any threshold limit of commission in INR for paying to Foreign Agent ?
Whether we have to do an agreement or MOU with the foreign Agent or not ?
13 May 2009
The TDS is not applicable in this case as per circular no 786 as mentioned by you yourself. There is a limit of percentage of sales from FEMA perspective, which you r bank can tell you. A agreement witht the party will definitly be of great help.
CAclubindia
