TDS on Consaltancy fees paid to non-resident for rendering service outside India

[PANKAJ GUPTA]

Dear Sir,

We are manufacturing company and wantto engage a Person Mr. X as Consultant who is Indian Citizen and residing in USA on H4 Visa since last 1 year (Non-resident) for the export promotion in USA and develop overseas customer in USA. We will pay him a monthly Consultancy fees and also reimburse Conveyance bill on actual basis which incurred in USA for meet the overseas customer. He will provide all services in USA.He has Pan no. of India

Please confirm the TDS liability/ provisions in respect of payment of Consultancy fees and ConveyanceReimbursement to non- resident as per Income tax law andDTAA. Please also confirm whether this service will fall for Fees for Technical service (FTS) or not.

Regards

PankajGupta

M-09212401641

[Ganeshan Kalyani]

In my view Tds is deductive.

AI Summary

TDS on consultancy fees to a non resident for services rendered abroad is deductible under applicable tax rules. TDS on consultancy fees paid to a non-resident for services performed outside India is questioned where the consultant, an Indian citizen resident in the US on an H4 visa, will receive monthly fees and conveyance reimbursements and holds an Indian PAN; the recorded response states that TDS is deductible on the payments described.