No TDS liability on income received on non-technical services outsourced to foreign company

The Director of Income-Tax Vs IBM India Private Limited (Karnataka High Court) The Hon’ble Karnataka High Court in The Director of Income-Tax v. IBM India Private Limited [I.T.A NO. 218 of 2014 dated January 16, 2023] has held that, the pay roll related services by assessee outsourced to its foreign company would be treated as business income earned by the foreign company and not a technical service therefore, would not be liable for Tax Deducted at Source (“TDS”) under Section 195 of the Income Tax Act, 1961 (“the IT Act”). Further held that, the payments received by foreign company...