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TDS U/s 195 on Access Online Portal

Posted @ January 16, 2019, 1:16 am under (TDS on Certain Payments)

Wheather tax to deducted on payment made for online services?

Payments made by Indian Company to  Access Online Portal for providing a password to access and use internet based Services hosted from Singapore are in nature of royalties and fees for technical services and taxable under article 12 of DTAA as also under section 9 and subject to deduction of tax at source as per decision in case of Cargo Community Network (P.) Ltd., In re [2007] 289 ITR 355 (AAR). 

It was held in case of ITO v. Cross Tab Marketing Services (P.) Ltd. [2014] 149 ITD 678 (Bang) Where assessee, in order to carry out market research for its clients, made payment of fee to specialist agencies located abroad for allowing access to record of online consumers maintained by them, in view of order passed by jurisdictional High Court in case of CIT (International) v. Wipro Ltd. [2011] 203 Taxmann 621/16 275 (Kar.), payment in question was to be regarded as ‘royalty’ taxable in India and, thus, assessee was liable to deduct tax at source while making said payment  

Payment made for online advertisement is not taxable: TDS is not applicable on payments to foreign enterprise who do not have PE in India and payment for online advertisement. However 6% equalization levy to be paid


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