Section 44DA - Special provision for computing income by way of royalties, etc., in case of non-residents

Non-resident royalties and technical fees tied to Indian permanent establishment taxed as business income; sections 44AA and 44BB rules

Income comprising royalties or fees for technical services paid by the government or an Indian concern to a non-resident (other than an Indian company) or a foreign company under agreements after 31 March 2003, where the payer's right or contract is effectively connected to the non-resident's permanent establishment or fixed place of profession in India, must be computed as profits and gains of business or profession under the Act. Deductions are disallowed for expenses not wholly and exclusively for the Indian permanent establishment or fixed place, and for payments (other than reimbursements) to the head office or other offices. Section 44BB does not apply. Non-residents must maintain books under section 44AA, obtain an audit and furnish the audit report by the specified date. Definitions of royalty, fees for technical services and permanent establishment follow the Act.