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Tds on commission paid to foriegn travel agent

CA AMIT GOSWAMI (IN PRACTICE PROPRIETOR) (131 Points)

02 January 2012

Dear sir/Friends

I wan t to know that there is any tds applicability on payment of commission on online booking of hotel rooms, tranport etc.in india to foriegn travel agent directly in foiegn currency.
The travel agent has no pe in india.

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3 Replies

CA Anoop Tiwari (Practicing Chartered Accountant) (135 Points)
Replied 02 January 2012

Yes U/s. 195 The rate of Tax 30% for Ind. Payee and 40% for Domestic Co.(Payee)

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karan jit singh (Consultant) (1299 Points)
Replied 02 January 2012

yes,it is taxable whether it is resident or non resident.

Chiradeep.R.H (Chirahi & Associates - Consultants) (240 Points)
Replied 18 December 2013

Please comment if anything contrary view to this: Income deemed to accrue or arise in India- Foreign agent – Commission - Business connection -Permanent establishment. (S. 4(1), 40(a)(ia), 195)Where a foreign agent of an Indian exporter operates in his own country and his commission is directly remitted to him. Such commission is not received by him or in his behalf in India, then such agent is not liable to income tax in India on commission received by him. As there was no right to receive income earned in India nor there was any business connection between assessee and ETUK, therefore, when income was not chargeable to tax in India under section 4(1), there was no question of invoking provisions of section 195 hence no disallowance can be made under section 40(a)(ia). (A.Y. 2007-08). Dy. CIT v. Eon Technology (P) Ltd. (2011) 46 SOT 323 (Delhi)(Trib.) Editorial: Affirmed by CIT. Eon Technology (P) Ltd. (2011) 203 Taxman 266 / 64 DTR 257 (Delhi)(High Court)