amit arun associates
   
Home Contact Us Site Map
Home about us Latest News Contact us

Fixed Assets Verification Services

Payroll Processing Service

Employee Benefit Administration

Tax Consulting

Foreign Direct Investment

File GST & E-TDS Returns
 
 
 
 
 

TDS on Payments under section 195

Posted @ June 4, 2019, 12:20 am under (SECTION 195)

GE India Technology Centre (234 CTR 153) (SC)

“Any sum chargeable to tax means”

  • The moment there is a remittance out of India, it does not trigger Sec 195. The payer is bound to deduct tax only if the sum is chargeable to tax in India read with sec 4, 5 and 9. 
     
  • Sec 195 not only covers amounts which represents pure income payments but also covers composite payments which has an element of income embedded in them
     
  • However, obligation to deduct TDS on such composite payments would be limited to the appropriate proportion of income forming part of the gross sum

Section 9 of the Act provides nature of incomes which are deemed to accrue or arise in India. As per Section 9 of the Act the following incomes shall be deemed to accrue or arise in India:

  • All incomes accruing or arising, directly or indirectly through a business connection in India;
  • Royalty Income; and
  • Fee for technical services.

S. 90(4) – NR cannot avail benefit under Treaty without Tax Residency Certificate (TRC) Applies to all NRs without any threshold limit

S. 90(5) – The assessee has to provide such other details as may be prescribed R. 21AB – specifies the information to be provided To be provided in Form 10F – if the same are not covered in the TRC Assessee should keep the relevant documents for the above information. Thus TRC and Form 10F go together Form 10F alone not sufficient Self-attestation

 

Section 9(1)(vii) in The Income- Tax Act
(vii) income by way of fees for technical services payable by-
(a) the Government; or
(b) a person who is a resident, except where the fees are payable in respect of services utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India; or
(c) a person who is a non- resident, where the fees are payable in respect of services utilised in a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India: 2 Provided that nothing contained in this clause shall apply in relation to any income by way of fees for technical services payable in pursuance of an agreement made before the 1st day of April, 1976 , and approved by the Central Government.] 3 Explanation 1-For the purposes of the foregoing proviso, an agreement made on or after the 1st day of April, 1976 , shall be deemed to have been made before that date if the agreement is made in accordance with proposals approved by the Central Government before that date.] Explanation 4 2].- For the purposes of this clause," fees for technical services" means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head" Salaries".

 


Website Designing  Company Image Map
Contact us Disclaimer Privacy Policy Site Map