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
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.
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