Withholding tax obligation applies on payments to non-residents only if there is income chargeable to tax in India

The Special Bench of the Tribunal, departing from the Karnataka High Court’s decision in the case of Samsung Electronics, rules that withholding tax obligation on payer applies on payments to nonresidents only if there is income chargeable to tax in India. Further obtaining CA’s certificate is an alternative procedure for lower or nil withholding cases. The Special Bench of the Income Tax Appellate Tribunal, Chennai (SB), in the case of ITO Vs. Prasad Production Ltd. (ITA No. 663/ Mds/2003) has held that withholding tax obligation on payer under Section 195 of the Income-tax Act, 1961 (th...