Foreign companies without an Indian presence can pay fees to Indian professionals without TDS u/s 194J, with quarterly reporting.
Foreign companies or foreign law firms without a presence in India face challenges in complying with tax deduction at source under section 194J of the Income-tax Act when paying fees to Indian residents. To address this, the circular clarifies that fees paid through regular banking channels to Indian professionals by non-residents without an agent or business connection in India are exempt from tax deduction at source. However, these foreign entities must submit a quarterly statement detailing the recipients' names and addresses to the Deputy Secretary, Foreign Tax Division, starting with the quarter ending December 31, 1995.