20 May 2010
My Question is relating to TDS on Import of Services.
We have to pay TDS on Import of Services or only on grossup Figure.
For Example' A who is working for a Consultancy firm for Net of Taxes for Rs. 2,50,000/-(Equalent to Indian Rupees). If we grossed Up with Tds then the same come around TDS Come around 27777/-(assume 10% TDS) the total Consultancy Charge comes to 2,77,777/- and the ST comes to 28611/-10.3% on 2,77,777/-) i already considered for TDs 27777/-. But I had a doubt whether I have to pay TDS on 28611/- also please calrify
20 May 2010
As per the provisions of Sec. 194J of the Income Tax Act, TDS is deductible on "any sum" payable to the recipient irrespective of the fact that the same forms income or not. However, the sum has to be fees for professional or technical service or royalty or the sum for not carying any business (refer Sec. 28(va). Since the sum of Rs. 28611/- paid to the recipient is not such sum, therefore TDS is not deductible on Rs.28611
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