tds on shiiping companies

This query is : Resolved

sumit (Querist)
Follow

31 January 2011 my question is that tds is not deducted when payment to foreign shipping co.;s due to circular no.786 and this circular arise if income is not recieved on behalf of non resident in india???what are the documents remiiter require to prove that non resident income is not taxable in india and tds is not to be deducted on it...??
thank u

Selvakumar Selvaraj

Selvakumar Selvaraj (Expert)
Follow

31 January 2011 TDS on payments to Non Resident arises only when the income received/receivable by them are taxable in India.(Section 195 of Income Tax Act). Hence if the shipping company's income not taxable in India then TDS not required to be deducted at source. But generally shipping companies will offer 7.5% of freight as income to tax. Match with you case.

Message likes : 1 times