TDS on payment to overseas consultants

[Shyam Naik]

Dear All, Our employees visit foreign countries for visiting mines. They hire /engage local guides & geologists during the course of field visit. Our employees pay the remuneration of the guides and geologist there only. The employee claim the remuneration paid along with their trave expenditure. Does the above payment of remuneration attract TDS u/s 195? Kindly reply. Thank you. Shyam

[Ganeshan Kalyani]

In the above situation you have reimbursed the expenses borne by your employee abroad. Being reimbursement TDS should not be applicable. However I welcome experts views on this.

[CSSANJAY MALHOTRA]

Endorse the views of Sh. Ganeshan Kalyani ji.

AI Summary

TDS on payments to overseas consultants: reimbursements to employees for foreign guides generally do not attract TDS. The question concerned whether withholding tax applies when employees pay foreign guides and geologists during field visits and are later reimbursed by their employer. The forum contributors concluded that reimbursements of expenses borne by employees are treated as expense reimbursements and therefore TDS u/s 195 should not apply, contrasting reimbursements with direct payments to nonresident consultants.