JIGAR MAISHERI (SR. EXECUTIVE ACCOUNTS) (34 Points)
27 July 2011Dear Professional Colleagues,
Query :
A limited company (not listed) employs persons out of india (China) to work in china on behalf of indian company
China employees are foreign individuals, they never been to india, their income accrues outside india & receivable in china only. Salary of china employees are transfered from india.
In such case what will be the liability of indian company regarding TDS on salary provisions?????
CA PARAS BAFNA
(Practising CA )
(33423 Points)
Replied 28 July 2011
The income of the "China Man" is not taxable in India as it is neither accruing or arising in India nor being received in India.
TDS is not required to be deducted.
JIGAR MAISHERI
(SR. EXECUTIVE ACCOUNTS)
(34 Points)
Replied 29 July 2011
Dear Paras ji,
But we are transferring salary to china employees from India & business is controlled from india. Then also how tds liability will not attract????
CA PARAS BAFNA
(Practising CA )
(33423 Points)
Replied 29 July 2011
First ascertain whether the person to whom any income is being paid, will be liable to tax in India.
NRI's are not liable to tax in India in respect of their foreign Income.
I explain by it by taking an example which is a just opposite case-
Suppose you have been employed by a CA firm of USA to look after its work in India.
Salary is remitted to you from USA. Where will you file your return. In India or in USA ?
Secondly you have to see that whether income is being received in India.
In the above example, You are working for an Indian Firm in USA. Being NRI your income will not be taxable here as you are receiving salary there in USA.
The same salary will be taxable in your hand if you would be receiving the salary in India.
As such the "China-man" is not required to visit India just for filing his return.
JIGAR MAISHERI
(SR. EXECUTIVE ACCOUNTS)
(34 Points)
Replied 30 July 2011
Ok paras ji, i am totally agree with your response, but if i want it to conclude it thorugh section reference then what will be that ??
and I would like to add some more in this regard..
for remittance of the salary in foreign currency to the china men, whether CA certificate (Form 15CA / CB) is required to be issued every month ??
Analysis of 20 GST Notices (including 2 Appeals) and Practise on Drafting(with recording)
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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