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Foreeign Remittance

Aditya Maheshwari (CA in Practice) (35867 Points)

23 November 2009

A company in India is making payment to a firm in USA for business development and other related activities in USA and the firm does not have any office in India.

So whether such income of the Firm is liable to tax in India and whether the same is liable for Tax Deduction at Source. If the same is liable for TDS then at which rate.

In my opinion the same should not be liable for tax as there is no business connection nor any PE in India and the service is being provided in USA.

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1 Replies

Narayanan.R (Chartered Accountant) (191 Points)
Replied 23 November 2009

Originally posted by :Aditya Maheshwari
"	A company in India is making payment to a firm in USA for business development and other related activities in USA and the firm does not have any office in India. So whether such income of the Firm is liable to tax in India and whether the same is liable for Tax Deduction at Source. If the same is liable for TDS then at which rate. In my opinion the same should not be liable for tax as there is no business connection nor any PE in India and the service is being provided in USA.	"

Tax will be attracted only if there is any business connection in india, irrespective of payment made from india or outside india. The service is done outside india so i think tax is not attracted.