Foreign Collaborators' Tax Exemption: Section 10(6)(viia) Applies If Services Performed in India; Lending Technicians Alone Not Enough.

The instruction clarifies the tax implications for foreign collaborators providing services to an Indian company. If a foreign collaborator performs services in India and receives fees from the Indian company, it may be considered as conducting business in India. Consequently, technicians employed in such business may qualify for tax exemption under section 10(6)(viia), subject to meeting other conditions. Conversely, if the foreign collaborator only lends its technicians to the Indian company without providing services in India, it may not be regarded as conducting business in India.