I am referring Sec 9 "Income deemed to accrue or arise in India".
Under Royalty/Technical Services Fees paid by a resident to non-resident.
The payment will not attract TDS if it is related to a business/profession/any other source carried on by the payer outside India.
I have confusion with regard to the phrase SOURCE OUTSIDE INDIA.
If there is a resident company is trying to fetch foreign sales and in the connection, it tries to participate in exhibition, paying fees to professional abroad etc, what will be the tax implications to the receiver.
The Indian company may earn some sales abroad by these exercises so will that be considered as "Business inside India source or Source Outside India"
08 March 2012
Income of a non-resident shall be deemed to accrue or arise in India u/s 9 (1) (v)/(vi)/(vii)and shall be included in the total income of the non-resident, whether or not,— (i) the non-resident has a residence or place of business or business connection in India; or (ii) the non-resident has rendered services in India.
As a result in my view Tds shall apply under I T Act. However DTAA may be referred for any beneficial rates.
10 March 2012
(vii) income by way of fees for technical services payable87 by— (a) the Government ; or (b) a person who is a resident, EXCEPT WHERE THE FEES ARE PAYABLE IN RESPECT OF SERVICES UTILISED in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or (c) a person who is a non-resident, where the fees are payable in respect of services utilised in a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India :
What is the relevancy of the words in CAPITALS on this case???
Arihanthji, you please share your input in the same.. I am confused as the services will be utilised outside india.
CAclubindia
