COMMISSION ON SALES PAID TO FOREIGN AGENT IN FOREIGN CURRENC

This query is : Resolved

CMA ASHISH (Querist)
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13 May 2009 Hi all,

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 ?

Please guide me at the case is urgent.

Thanks

taxindiaconnect

taxindiaconnect (Expert)
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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.