TDS Query

This query is : Resolved

Ranna (Querist)
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24 May 2011 Facts of a case: An Indian company wants to make a payment to Business Monitor International for $ 3140 for providing Online services in 2010 Dec.The service was to provide Induatry and market risks in global markets.

Shdoul indian company deduct TDS on the above payment? and why?

Note: The company has no PAN number issued by IT authorities in India

CA. Himansu Sekhar Kabi

CA. Himansu Sekhar Kabi (Expert)
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24 May 2011 I am presuming that it's a foreign remitance to a nonresident.

Section 195 reads as "Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest (not being interest on securities) or any other sum chargeable under the provisions of this Act (not being income chargeable under the head "Salaries") shall,................"

from the above it's clear that any sum chargeable under the income tax act except salary is subject to Section 195. the service which you have mentioned is subject to tax in india and hence warrants TDS. If the the vendor is not having any PAN number in India the rate of TDS is 20% if india doesn't have a DTAA with the country of remitance.