xien (db) (135 Points)
10 May 2009If an Indian company having office only in India, employs a US national (us citizen) on part-time consultant (Management consultant) basis and pays some fees for his work. The fees is wire transferred to him/her.
In such a case what are the rules for TDS deductions. Is any TDS needs to be deducted.
What all is required so that the indian company can claim for expense deductions on the payment made to foreign consultant.
Thanks and regards,
xien
Sachin
(Chartered Accountant)
(419 Points)
Replied 10 May 2009
xien
(db)
(135 Points)
Replied 11 May 2009
Thanks for taking a look into it.
Status of the Foreign person: 2 people are there, -
Person1 - an American (a local american with no history at all in India) -
Person2 - and an Indian having US citizenship. (born and brought
in US, but now settled in US with US citizenship). This person has not
earned anything in India atleast since last 10 years and have not paid
any tax in India. he is US citizen now.
Service rendered by these people is management consultancy/software
consultancy. basically sales person.
ultimate user is difficult to tell as the indian firm want to hire
them for doing some sales work.
basically indian firm works for US clients. but to get US clients the
indian firm will use the sales/software service for these 2 people.
Could you please let me know on this.
Thanks,
xien
xien
(db)
(135 Points)
Replied 11 May 2009
Thanks for taking a look into it.
Status of the Foreign person: 2 people are there, -
Person1 - an American (a local american with no history at all in India) -
Person2 - and an Indian having US citizenship. (born and brought
in US, but now settled in US with US citizenship). This person has not
earned anything in India atleast since last 10 years and have not paid
any tax in India. he is US citizen now.
Service rendered by these people is management consultancy/software
consultancy. basically sales person.
ultimate user is difficult to tell as the indian firm want to hire
them for doing some sales work.
basically indian firm works for US clients. but to get US clients the
indian firm will use the sales/software service for these 2 people.
Could you please let me know on this.
Thanks,
xien
xien
(db)
(135 Points)
Replied 15 May 2009
I come to know that this basically falls under "Import of services".
So let me put my question clearly. If I running a propriotorship company hire a US national (origin or NRI with US citizenship) who has no tax history in India. And I hire him for doing some software service , management consultancy (basically sales representative).
Can someone tell me what TDS I have to deduct. What registration I have to do. Do I have to pay any extra tax since I am doing import of service? Can I claim whatever payment made to him/her under my expense. And what could be the best way to transfer money to him/her. Currently I have no knowledge at all. So any advice/points would be helpful.
Thanks for looking into it,
xien
CAclubindia
