S. 195 Withholding of tax not required on salary of seconded employee reimbursed to a foreign company since such payment is not for rendering technical services

Indian Company exercising control and supervision over a seconded employee and bearing the salary cost should be considered as an economic employer and not liable to withhold tax under Section 195 of the Act on the reimbursement of the salary to the foreign company on which tax has been withheld under Section 192³ of the Act. Further the Tribunal held that the payment to IDS USA did not represent ‘Fees for Technical Services’

INCOME-TAX APPELLATE TRIBUNAL,

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