Tax applicability for legal services by a German in Germany?
This query is : Resolved
16 October 2010
We have taken a legal service of a German lawyer to proceed a case in Germany. Now we are required to pay him through TT.
Now, I want to know, what will be our tax liability under Income tax act ?
for your reference, the payer is a pvt ltd co.
Now, I want to know, what will be our tax liability under Income tax act ?
for your reference, the payer is a pvt ltd co.
16 October 2010
The provisions of section 195 Apply and TDS is required to be deducted from payments made in this query. For detailed reply, please write on taxindiaconnect@gmail.com with full details.
16 October 2010
But the question is : If section 195 apply ?
Legal services has been rendered in Germany related to filing a suit against a German company in a German court.
Of course, the other party is an Indian pvt ltd co.
Legal services has been rendered in Germany related to filing a suit against a German company in a German court.
Of course, the other party is an Indian pvt ltd co.
16 October 2010
In my openion provisions of section 195 h. i.e tds shoul be deducted 10.3%. apply if the agreement made after 1st june 2005 and the recepaint ia a non - resident non - corporate person .
16 October 2010
In my view since service is rendered outside India and payment also made outside India TDS deduction is not required. No Tax Liability of service provider as he is providing service in Germany and receiving the payment there. His income is accruing in Germany and also received there. So no tax liability arises.
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17 October 2010
Continuing Gupta Ji, since the Non Resident gave services outside India and never stayed in India, receives payment outside India and has no permanent base in India or any other permanent establishment in India, income itself is not taxable in India and ,therefore ,TDS provisions is also not applicable.
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