section 195

TDS on Foreign Payment for Event to be held outside India

Income Tax - As per section 195(1) of Income Tax Act, any person responsible to for paying to a non-resident, not being a company, or to a foreign company, any interest or any other sum chargeable to tax shall, at the time of credit of such income or at the time of payment, whichever is earlier, deduct income-tax thereon at the rates as applicable....

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Section 195 TDS on Commission paid to Non-resident: An Analysis

Income Tax - Please also refer the case JLC Electromet Pvt. Ltd. Vs ACIT (ITAT Jaipur).  I’m trying to analyse only some of the provisions applicable, only for understanding purpose. As per Section 195 of Income Tax Act, any person who makes payment to non-resident by way of interest (except the interest as specified in Sections 194LB or […]...

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Section 195 TDS on payment of any other sum to a non-resident

Income Tax - Provisions of tax deduction at source (TDS) with regard to payment of any other sum to a non-resident is covered under section 195 of the Income Tax Act, 1961 which are explained hereunder....

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Changes in TDS provision vide Interim and Final Budget 2019

Income Tax - Changes in TDS provision via Finance bill,2019 as passed by Lok Sabha and Interim Budget, 2019 1. Sec 194M (new section): TDS on payment exceeding Rs 50 lakhs to Contractor or Professional by Individual/HUF (Applicable w.e.f. 01/09/2019) Insertion of New Section after Sec 194LD: (1) Any person, being an individual or a Hindu undivided fam...

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Does Subscription Fee fall under royalty?

Income Tax - With the increase in the complexity and growing enterprise landscape, a number of IT companies engage in creation of databases and soft wares and have also entered in the business of data collection and data systemisation. In return, these vendor companies charge annual subscription fee that can be defined as the amount of money the vendo...

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Procedural & technical issues on IDS, 2016 clarified

Income Tax - Clarification on certain procedural and technical issues regarding the Income Disclosure Scheme, 2016 (IDS) under section 119 of the Income-tax Act, 1961 read with section 195 of the IDS -reg. F.No.225/ 282/ 2017/ITA.II Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes (ITA. II) North Block, New D...

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Section 195: 6 Suggestions made by ICAI for Rationalization of Provisions

Income Tax - Finance Act, 2012 extended the obligation to withhold taxes to non- residents irrespective of whether the non-resident has -...

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CA Certificate not required for certain remittances: Govt

Income Tax - Government has recently modified the Foreign Exchange Management (Current Account Transactions) Rules, 2000 and the Liberalized Remittance Scheme (LRS) for resident individuals for further liberalizing the existing guidelines. Accordingly, all resident individuals, including minors, are allowed to freely remit upto USD 2,50,000...

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Vodafone ruling effect – Exporters question TDS on foreign payment post

Income Tax - The Supreme Court judgement on Vodafone tax case seems to have opened a Pandora's box with exporters too expressing reservation on tax deducted at source (TDS) for payment with regard to overseas transactions. Exporters' body FIEO today questioned the applicability of Section 195 of the Income Tax Act, under which they are asked to pay T...

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Cross Boarder transactions are subject to tax in India – HC in Vodafone

Income Tax - The Bombay High Court has dismissed a petition filed by Vodafone International Holdings against the tax department, saying the transaction is chargeable to income tax and the department has the jurisdiction over cross-border mergers since the assets lies in India....

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Depreciation allowable on non-compete fees: HC

PCIT Vs Ferromatic Milacron India Pvt Ltd (Gujarat High Court) - Where non-resident agents appointed by assessee for procuring export orders did not have permanent establishment in India and their activities as commission agents are being carried out outside India, merely because a portion of the sale to the overseas purchasers took place in India, would not make...

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Payment to parent company for copyrighted software on principle to principle basis cannot be treated royalty

Aveva Information Technology India (P) Ltd. Vs DCIT (ITAT Mumbai) - Payment to parent company for copyrighted software on principle to principle basis cannot be treated royalty and TDS not applicable on payment to parent company not having PE in India....

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Section 195(1) & 40(a)(ia) talks about tax deduction where sum is chargeable to tax

JLC Electromet Pvt. Ltd. Vs ACIT (ITAT Jaipur) - Coming to the provisions of section 40(a)(ia) of the Act, the said section also provides that any interest, royalty, fees for technical services or other sum chargeable under this Act on which tax is deductible at source under chapter XVII-B and such tax has not been deducted or after deduction has ...

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Section 206AA not override provisions of section 90(2)

DCIT Vs BEML Ltd. (ITAT Bangalore) - Section 206AA does not override provisions of section 90(2) and in case of payment made to non-resident, assessee correctly applied rate of tax prescribed under concerned DTAAs and not as per section 206AA because provisions of the DTAAs were more beneficial and DTAA acquired primacy in such case....

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No TDS on Commission to non-resident agents for procuring export orders

Punjab Stainless Steel Inds. Vs ACIT (ITAT Delhi) - Commission paid to foreign agents for procuring export orders could not be treated as income taxable in India when parameters of DTAAs were applied to transactions in question. Also non-resident agents did not have PE or business connection in India. Therefore, impugned payment could not be held as ...

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CBDT proposes to inset new Income Tax rule 29BA and Form 15E

F. No. 370142/24/2019-TPL - (31/12/2019) - Public consultation on the proposal for amendment of Income-tax Rules 1962, to inset new rule 29BA and Form 15E, to give effect to the amendment in section 195 of the Income-tax Act, 1961 (the Act) vide Finance (No.2) Act 2019- reg....

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Approval of CIT (Intl. Taxation) not required for certificates U/s. 197/195 if revenue effect is less than Rs. 10 crore

Notification No. F.No.275/16/2019-IT(B) - (02/09/2019) - it has been decided to raise threshold of revenue effect for issue of certificates under section 197/195 needing approval of the Commissioner of Income Tax (Intl. Taxation) to Rs. 10 Crore. This threshold will be applicable for all stations in respect of all applications of non-resident taxpayers ei...

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Issue Lower/ Nil Rate TDS deduction Certificate within prescribed time

F. No. 275/20/2018-IT(B) - (26/07/2018) - CBDT instructed its officers to Adhere to prescribed time-line for issue of certificate of no deduction or deduction of tax at lower rate u/s 197 and 195 of the I.T. Act-1961...

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Relaxation in conditions for issue of certificate without tax deduction

Notification No. 31/2016-Income Tax - (05/05/2016) - Income Tax Rules 29B is related to Application for certificate authorising receipt of interest and other sums without deduction of tax under sub-section (1) of section 195. In this rule one of the condition for issue of certificate was that person applying for the certificate has not been subjected...

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Procedure for submission of Form 15CC for remittance U/s. 195(6)

CBDT (DIT-Systems) Notification 8/2016 - (04/05/2016) - Under sub-section (6) of section 195 of the Income-tax Act, person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the provisions of this Act, is required to furnish the information relating to payment of such sum, in s...

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Recent Posts in "section 195"

Depreciation allowable on non-compete fees: HC

PCIT Vs Ferromatic Milacron India Pvt Ltd (Gujarat High Court)

Where non-resident agents appointed by assessee for procuring export orders did not have permanent establishment in India and their activities as commission agents are being carried out outside India, merely because a portion of the sale to the overseas purchasers took place in India, would not make assessee liable to deduct tax at source...

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Posted Under: Income Tax |

Payment to parent company for copyrighted software on principle to principle basis cannot be treated royalty

Aveva Information Technology India (P) Ltd. Vs DCIT (ITAT Mumbai)

Payment to parent company for copyrighted software on principle to principle basis cannot be treated royalty and TDS not applicable on payment to parent company not having PE in India....

Read More

TDS on Foreign Payment for Event to be held outside India

As per section 195(1) of Income Tax Act, any person responsible to for paying to a non-resident, not being a company, or to a foreign company, any interest or any other sum chargeable to tax shall, at the time of credit of such income or at the time of payment, whichever is earlier, deduct income-tax thereon at the rates as applicable....

Read More
Posted Under: Income Tax |

Section 195 TDS on Commission paid to Non-resident: An Analysis

Please also refer the case JLC Electromet Pvt. Ltd. Vs ACIT (ITAT Jaipur).  I’m trying to analyse only some of the provisions applicable, only for understanding purpose. As per Section 195 of Income Tax Act, any person who makes payment to non-resident by way of interest (except the interest as specified in Sections 194LB or […]...

Read More
Posted Under: Income Tax |

CBDT proposes to inset new Income Tax rule 29BA and Form 15E

F. No. 370142/24/2019-TPL (31/12/2019)

Public consultation on the proposal for amendment of Income-tax Rules 1962, to inset new rule 29BA and Form 15E, to give effect to the amendment in section 195 of the Income-tax Act, 1961 (the Act) vide Finance (No.2) Act 2019- reg....

Read More

Section 195(1) & 40(a)(ia) talks about tax deduction where sum is chargeable to tax

JLC Electromet Pvt. Ltd. Vs ACIT (ITAT Jaipur)

Coming to the provisions of section 40(a)(ia) of the Act, the said section also provides that any interest, royalty, fees for technical services or other sum chargeable under this Act on which tax is deductible at source under chapter XVII-B and such tax has not been deducted or after deduction has not been paid on or before the due date ...

Read More

Section 206AA not override provisions of section 90(2)

DCIT Vs BEML Ltd. (ITAT Bangalore)

Section 206AA does not override provisions of section 90(2) and in case of payment made to non-resident, assessee correctly applied rate of tax prescribed under concerned DTAAs and not as per section 206AA because provisions of the DTAAs were more beneficial and DTAA acquired primacy in such case....

Read More

No TDS on Commission to non-resident agents for procuring export orders

Punjab Stainless Steel Inds. Vs ACIT (ITAT Delhi)

Commission paid to foreign agents for procuring export orders could not be treated as income taxable in India when parameters of DTAAs were applied to transactions in question. Also non-resident agents did not have PE or business connection in India. Therefore, impugned payment could not be held as taxable in the hands of non-resident age...

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No TDS u/s 195 on payment of buying agency commission to non-resident

M/s. Adidas India Marketing Pvt. Ltd. Vs ITO (ITAT Delhi)

Consideration paid by assessee for services rendered by non-resident were purely in the nature of procurement services and could not be characterized as ‘managerial’, ‘technical’ or ‘consultancy’ services and thus, could not be classified as fee for technical services and accordingly, not liable for deduction of tax at source ...

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Referral fees to foreign concern for introducing clients is not a fee for technical services

M/s Knight Frank (India) (P) Ltd. Vs ACIT (ITAT Mumbai)

Services rendered by foreign concern for introducing a client did not make-available any technical knowledge, experience, skill, know-how or processes to assessee, therefore, related payment did not fall within the realm of "Fees for included services" as envisaged in Article 12 of the Indo-US, DTAA and payment made to foreign concern con...

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