Penalty on Indian company as per US Court, not liable to TDS u/s 195 – AAR

Brief of the Case Authority for Advance Rulings held In the case of Satyam Computer Services Ltd., that it is trite law that unless the payment made attracts the tax under the Income Tax Act, there would be no liability to deduct tax under Section 195 of the Income Tax Act. An amount ordered by the US Court which is in nature of penalty can never attract any tax nor would such a payment made by the applicant attract any tax liability. Hence, the applicant would not be required to deduct any such amount under Section 195. Facts of the Case The Applicant is an Indian company incorporated under ...