TDS on Commision paid to foreign agent

This query is : Resolved

Deepak Biyani (Querist)
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23 July 2010 Commision paid to Foriegn Agent in foriegn currency U/s 195(2)

Assessee book e.g.
For example: Invoice value $1000 commision is to be paid 5% = $5 into conversion rate 45 i.e Rs. 225 debited to commision a/c in the books of assessee.
As conversion is not fixed and amount is paid in dollar by the bank only assessee book is debiting dollar from the conversion into Indian Rupees and the effect in the books comes in Indian Ruees
WHETHER TDS IS APPLICABLE OR NOT?

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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26 July 2010 TDS shall be applicable under Section 195. Whther amount is paid in INR or $ or in any currency it does not metter. If amount paid to the party is taxable in India then TDS shall be applicable.