Monthly Archives: February 2015

  • Amount to be disallowed from payments to Non-Residents on which tax is deductible u/s 195

    February 14 2015

    On what amount TDS u/s 195 is required to be deducted while making payments to non-residents? Whether on gross amount or on net amount i.e. only on the income element ? In case where TDS has not been deducted what amount should be taken as base by the Income Tax officers for treating the assessee as being in default??? 

    The CBDT earlier directed AOs u/s 119 that in a case where the assessee fails to deduct TDS u/s 195, the Income Tax officer cannot treat the whole sum remitted to the non-resident as being chargeable to tax but he has to determine the appropriate proportion of the sum chargeable to tax as mentioned in s. 195(1) for treating the assessee as being in default u/s 201. Such appropriate proportion of the sum would depend on the facts & circumstances of each case i.e. nature of remittance, income component therein etc..

    Further to the above, disallowance regarding "other sum chargeble" under section 40(i)(a) is triggered when the deductor i.e. resident payee fails to withhold tax as per provisions of Section 195 of the Act. Akin to the chargebility and withholding of taxes on the whole amount or proportionate amount, concerns have been raised on the amount to be disallowed in such a situation.

    The CBDT has vide circular No. 3/2015 dated 12th February, 2015 has clarified that "the appropriate portion of the sum which is chargeable to tax under the Act shall form the Basis of such disallowance and shall be the same as determined by Assessing Officer jurisdiction for the purpose of Section 195(1).

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  • Form FC – GPR for issue of shares to Non-Residents – to be filed Online

    February 13 2015

    Reserve Bank of India, has, with a view to promote, the ease of reporting of transaction under Foreign Direct Investment, has enabled the Online Filing of Form FC- GPR - which a company submits to RBI for reporting the issue of eligible instruments to the overseas investor against the above mentioned FDI inflow.

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