Search Results For: Non-resident


QUERY: X purchased a vacant site in Andhra Pradesh from Y (Non-Resident) for sale consideration of Rs. 25,00,000/-, in the Financial Year 2010-11, without deducting TDS. Whether section 195 of the Income-tax Act, 1961 would be applicable?
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The objective of this section is to ensure that the tax on the income of non-residents and foreign companies is deducted at source, so that the department is not put to the trouble of recovering it from such persons whose connections with India,

QUERY: Whether TDS u/s. 195 is required for advertisement on Facebook, Google etc?

In the era of e-commerce and social networking, a lot of Indian Companies are using social marketing by placing advertisement on sites like Facebook, Google etc. These sites are owned by non-residents and payments are usually made using credit cards. Whether TDS provision u/s. 195 are applicable to such payments? Further website neither allows any reduction in payments nor their PAN is available with the payer. In such scenario how TDS obligation is to be discharged?
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No TDS is required to be deducted, as neither of the above companies have PE in India and payments made to them for advertisement cannot be considered as ‘royalty’ as held by the Mumbai Tribunal

QUERY: XYZ is engaged in the business of manufacturing and export of various chemicals. It pays commission to various overseas agents, who procures orders for it from outside India. The Commission is payable only on actual export sales routed through the agents. The question is whether it is necessary to deduct tax at source under section 195 on export commission in view of withdrawals of circulars bearing no. 23 dated July 23,1969 and bearing no. 786 dated February 7, 2000.
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Even though, the circulars stated above have been withdrawn vide circular no. 7 of 2009 dated October 22,2009, no TDS is required to be deducted as no income is chargeable to tax under section 195 of the Income-tax Act, 1961, as non-resident selling agents have rendered the services outside India for procuring the orders and commission is payable to them outside India.

QUERY: A Ltd. appoints a commission agent in UK for getting export orders for garments. The commission agent does not have any office in India and has produced a tax residency certificate. The commission agent does not have a PAN. Whether by virtue of section 206AA tax has to be deducted even though under the Double Taxation Avoidance Agreement the business profits are not taxable in the absence of a permanent establishment in India.
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The Supreme Court in GE India Technology Centre Pvt. Ltd. [327 ITR 456] has held as under:

“The most important expression in section 195(1) of the Income-tax Act, 1961 dealing with deduction of tax at source consists of the words “chargeable under the provisions of the Act”. A person paying interest on any other sum to a non-resident is not liable to deduct tax if such sum is not chargeable to tax under the Act. Section 195 contemplates not merely amounts,

QUERY: Where Non-Residents are deputed to work in India and taxes are borne by employer, if any refund becomes due to the employee after he has already left India and has no bank account in India by the time the assessment orders are passed, whom the refund can be issued?
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The refund can be issued to the employer as the tax has been borne by it.