Please Help: Tds

Posted Date : 28-Jul-2013 , 11:20:59 pm | Posted By harvinder

What is the rate of TDS if one has to make commission payment to sum foreign firm/individual

Category : Income Tax | Answers : 1 | Comments : 3 | Hits : 103

Answers

Answer By: SUBHASH KUMAR JHA

According to section 195 of the income tax act if any person pays commission to NRI Firm/Individual then he will have to deduct tax at source @ 30 % + 3% cess

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SUBHASH KUMAR JHA

29-Jul-2013 , 12:04:33 pm

Follow the link http://www.taxfaq.in/rate-of-tds-of-payment-of-interest-to-non-resident-under-section-195-of-income-tax-act.html

Section 195 of the Income tax Act requiring to deduct tax on foreign payments i.e. sum paid by Resident to Non Resident, comes in to force only when the payment made to the Nonresident is his income chargeable under Indian Income tax Law. Therefore TDS liability on such commission is an offshoot from its chargeability to Income tax under Section 5(2) of the Act. See GE India Technology (327 ITR 456)(SC) Section 5(2), the charging section for taxing nonresident income provides for two conditions. First condition of receipt of income in India is ruled out since payment of commission is made directly outside India. However the second condition viz., income accrues or arises or deemed to accrue or arise requires considered elaboration.