Praveen Kumar ( CA-Final Article Assistant) (85 Points)
01 September 2010Hiii,
Situation:-
I am corporate company in india.I run my business all over the world.one of the indian in USA is our agent doing marketing on behalf our. so we paying commission to that indian(Who wont come to india).
Questions:
(i) Will TDS attract to that persons?if it attract in what catergory he will come under?
(ii) At what percentage? for A.Y 10-11
Sreejith.R
(CA student)
(37 Points)
Replied 01 September 2010
Since the agent is a non resident, no part of his income will be taxable in India.Your agent working in USA and his income will be taxed there itself.Hence there is no need to deduct TDS on payment to a non resident for marketing on behalf of an indian Comapny
Nimish Jain
(Internal Auditor/CA final student)
(240 Points)
Replied 01 September 2010
Sharad Saini
(Student)
(286 Points)
Replied 02 September 2010
u have mentioned that he will not come in India ..... so he is a non resident then hhis income is not taxable in India then there is no need to deduct tax at source.......
Paidi Sujith Reddy
(Final)
(35 Points)
Replied 02 September 2010
"IF THE RECIPIENT IS NON-RESIDENT(OTHER THAN FOREIGN COMPANY), SURCHARGE IS NOT APPLICABLE BUT EC AND SHEC ARE APPLICABLE"------- This is a statement in Singania Reckoner AY 2011-12 page-A-326, Notes. Wat does the above staement mean?
As per the answers given, when TDS it self is not deducted, wher is da scope for EC and SHEC?
Implied the statement mean that TDS is deductable up to my understanding.
Please Clarify.
Harsh Vaidya
(Semi Qualified)
(21 Points)
Replied 03 September 2010
Yes TDS must be deducted U/s 195 for payment to non Resident at rate specified in (i) Finance act, or (ii) DTAA u/s 90, or (iii) Agreement notified by Central Govt. u/s 90A, Whichever is beneficial to Assessee.
Paidi Sujith Reddy
(Final)
(35 Points)
Replied 03 September 2010
Hence, commission paid to non-resident attracts TDS u/s 195 @ 30.9% including EC & SHEC. but no SC.
Sharad Saini
(Student)
(286 Points)
Replied 03 September 2010
as per sec 195, TDS is deductible on payment to a non-resident on income chargeble under this act. But the above payment is not chargeable to income tax.... as the person is a non resident and he rendering services outside India and getting payment outside india....... since it is not taxable at all then there is no need to deduct tax at source....................
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 03 September 2010
As rightly said by Saini above, the amount is not taxable in india, coz, service is rendered outside India. Hence, it is not taxable in India and TDS u/s.195 is not attracted.Pls refer CBDT Circular N0.786 dt. 7th february 2000. Also refer CIT VS. COOPER ENGG LTD (1967) case
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