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TDS on salary for services rendered abroad

An Indian company has obtained an overseas contract for operation and maintenance of a manufacturing plant abroad . They have appointed employees abroad who are non resident as far as india is concerned. The company remits salary from India to non resident employees abroad in foreign currency. Whether salary remitted is liable for TDS .

Dear Mr rangarajan

when any payment is made to a non resident section 195 comes into play and one has to consider if the payment is chargeable to tax in India or not.

section 5(2) will not make it deem to arise or accrue in India. Further If the country has DTAA with India , in all the agreements Salary is taxable only in the country where the assessee is employed.

In my opinion TDs need not be deducted . You are require to give form 15CB/CA

regards

srinivasan

 

Dear Mr. Rangarajan,

No, TDS is not liable on this transaction.

As per Section 9 of Income Tax Act, salary earned outside India cannot be deemed to accrue in India. Further as per DTAA of India with most of the countries, salary earned by a Resident of one country is taxable only in that country unless employment is exercised in the other country. Therefore in your case, since the employees are Non-Resident in India and employment is not exercised in India, therefore it is not taxable in India.

Further please note that Indian Company is liable to file "Form 15CA in Part D" as per Rule 37BB of Income Tax Act, even in cases where remittance is not chargeable to TDS. Please see the below relevant extract from Rule 37BB(2).

(2) The person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum which is not chargeable under the provisions of the Act, shall furnish the information in Part D of Form No.15CA.

However, please note that you are not liable to secure Form 15CB from Chartered Accountant in this case.

Pl feel free to revert, if you need any further clarification in this regard.

Kind Regards
Mohit Jain
9582757578

Dear Sir,

An Indian Co. has established it's subsidiary in UAE. The employee of UAE entity shall receive salary from Indian Entity till the opening of bank account of UAE Entity (as per the agreement between Indian and UAE entity). Whether TDS deductable by Indian Entity for remittance

We are indian company making supply to Maldives and executing installation services at Maldives. For all service payments made to Maldives from India, whether TDS is applicable. Also please clarify whether any TDS to be remitted under import of service (the service is being received by us at Maldives only)

please clarify.

There is an employee who is from south Africa and works in India but he gets his salary in us dollars. and, he gets his salary in his south African account.Is tds applicable on this or not

26
Apr

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