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TDS u/s 195

Pankaj Arora (Learner) (3134 Points)

10 July 2019

Hi..

ABC limited company planning to incorporate a company in UK, therefore ABC limited company have to pay some consultancy charges in UK.

My query is whether ABC limited company need to deduct TDS 195?

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5 Replies

V. NAVEEN KUMAR SICASA (192 Points)
Replied 10 July 2019

Yes, tds has to deduct.
If foreign consultant having Indian pan then 10% otherwise 20%. Such 20%will be reduced even in case of having certificate by foreign consultant from Indian govt for lower tds deduction.

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Pankaj Arora (Learner) (3134 Points)
Replied 12 July 2019

but income for consultant accrue or arise outside India

Priya Kashyap (Student) (7053 Points)
Replied 13 July 2019

his return filed India too
resident to check
not citizenships

Suresh Thiyagarajan (Student) (3986 Points)
Replied 13 July 2019

1. Only those income which deems to accrue or arise in India will be subject to tax in India.
2. However, there arises a question on how to determine whether the income deem to accrue or arise in India..?
3. As per sec 9(1)(i) reads as "all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India"
4. So it could arise from a,
i) business connection in India or
ii) through from any property situated in India or
iii) any asset or source of income in India or
iv) through a transfer of a Capital Asset situated in India.
If income arises from one or more of the above sources, then it will be considered as income deemed to accrue or arise in India.
5. In the above case, consultancy charges are paid in UK and it is in relation to property which is going to be situated in UK. So, the above consultancy charges do not deem to accrue or arise in India. Hence, the above income will not be chargeable to tax in India and TDS is not required to be deducted.
Please correct me if the above interpretation has an alternative view.