Tds travel docs
However, as mentioned above, what is very interesting to understand (and what can be called typical twists of law) is that the same transaction, which is FTS as per the Income tax act, when seen from the lens of DTAA, may not remain FTS and as such may not remain liable for TDS. At this point, it may look like it is taxable in India and accordingly a TDS is required from this payment. Thus the moment there is any technical, managerial or consultancy aspect involved in any service, it is possible to argue that it is a Technical Service.įor example : Testing of a product in a US laboratory and payment of Lab charges for the same may be categorized as a payment for FTS as per Sec. 9 to mean “consideration for any technical, managerial or consultancy services”. 9(1)(vii) of the act, if a payment is in the nature of FTS,, it is taxable in India regardless of any business connection/ permanent establishment of receiver in India (except when the payment is for any business of the payer being run outside of India).įTS has been defined in Sec. Fees for Technical Services – As per DTAAįees for Technical Services – As per Indian Income Tax ActĪs per Sec.Fees for Technical Services – As per Indian Income Tax Act.The cardinal principal in this regard is that for foreign remittance taxation, the Income tax act or DTAA, whichever is beneficial, shall prevail. 195, the most important point to note is that despite a payment being treated as FTS as per the Income tax Act, the same may not be treated as FTS in relevant DTAA and as such TDS may not be required. To understand the intricacies of FTS vis-a-vis TDS U/s. So a distinction between payment being Business Income or FTS in the hands of NR recipient becomes quit crucial. However if the payment is treated as FTS then regardless of the Permanent Establishment in India, a TDS is required u/s. If the payment is in the nature of Business income of NR recipient, it requires a TDS only when the NR recipient has a Business Connection/Permanent Establishment (PE) in India. (So much so that in certain cases, they have tried to treat even business commission as Fees for Technical Services)Ģ. The way Fees for Technical Services has been defined in the Income tax act is quite generic, and income tax authorities in number of cases tend to categorise payment for almost all types of services as FTS payment. There are 2 specific aspects, which lead to this complication:ġ. 195, Fees for Technical Services (FTS) is quite an intricate concept. (For our purposes Tax treaty and DTAA connotes the same thing and in this article these two terms have been used interchangeably) and then with reference to the Tax treaty/Double Taxation Avoidance Agreement (DTAA) which India has with the country of residence of the NR receiver.As per scheme of the act, this taxability in India is to be decided in two stages : 195 of the Indian Income tax Act (the Act), requires TDS from a payment to a non resident (NR) ONLY if the same is taxable in India in the hands of NR. 195 in respect of payments to Foreign Professionals- Independent Personal Service. This article is in continuation of my earlier article about TDS u/s.
![tds travel docs tds travel docs](https://images.template.net/21099/Travel-Service-Invoice.jpg)
![tds travel docs tds travel docs](https://traveldimensions.net/wp-content/uploads/2017/05/passport.jpg)
![tds travel docs tds travel docs](https://cdn.slidesharecdn.com/ss_thumbnails/tdsasia2011brochure-110203064726-phpapp01-thumbnail-4.jpg)
It should prove usefull for both tax professionals and also for non tax professionals/entrepreneurs, as in number of cases foreign remittances TDS results in unnecessarily increasing cost of transaction for Indian entity. This article is meant to be a tool of understanding the basics of TDS on Fees for Technical Services when paid out of India. Foreign Remittances – Fees for Technical Services-Whether a TDS is always required under Indian Income Tax Act?