Sec 195


02 April 2014 Dear Experts,

I need your help regarding applicability of Sec 195 of Income Tax act.

One Indian company is making payment to foreign branch of another Indain Co in Singapore Dollar.

Weather witholding tax is applicable U/s 195??

02 April 2014 Dear Sandeep,

The place of transaction is not the criteria for determination of application of sec 195

It is the residential Status that matters(residential status of receiver)

As per section 6(3), an Indian company is always resident in India. A foreign
company is resident in India only if, during the previous year, control and
management of its affairs is situated wholly in India.

In your case as the receiver of the payment is branch of Indian company, it is clearly evident that it is Resident

So Section 195 of income tax act is not applicable as it is payment to Resident


Regards,
Abhilash.



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