Payment to a foreignor

This query is : Resolved

P.C. Joshi (Querist)
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18 July 2015 Dear Friends,
An Indian Company has enganed a foreign national as an Inter. It wants to pay him Rs 50000/- per quarter as internship/allowance.he does not have a bank account and PAN in India. So amount needs to be paid in cash.Is there any issue of FEMA involved here?

But the main issue is tax implications.

Can the amount paid to him be treated as salary and since the amount is less than taxable amount, so No TDS be applicable.

Second option:

Part of the amount be treated as reimbursement of his travelling and conveyance expeses and part amount(Less than Rs 30,0000/-) as internship fee/stipend.

Please advise.

Thanks & Regard

PC Joshi

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 July 2015 The payment is in Indian rupee for services rendered in India, no FEMA involved.
You can treat it as salary/internship fee/stipend/allowances.
No TDS applicable as it is below taxable limit.
You can't make cash payment exceeding Rs 20,000 in a day.

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