Circular - No applicability of TDS

[pardeep bisht]

Ref to reply form Mr Jain dtd 1/1/10 that no TDS to be deducted on commissions to parties who are having office in India. Please confirm circular no and SC ruling on the same.

[Rama Krishana]

You may read the section 9(1)(i) - explanation 1(b) which is run as, "(b) in the case of a non-resident, no income shall be deemed to accrue or arise in India to him through or from operations which are confined to the purchase of goods in India for the purpose of export ;" Therefore, the view of Mr. Jain was correct. Basic provision of Income Tax Act, 1961 clears the situation itself.

AI Summary

No TDS on Commissions for Non-Residents Buying Goods in India for Export: Income Tax Act, Section 9(1)(i). A query was raised regarding the applicability of Tax Deducted at Source (TDS) on commissions paid to parties with offices in India, referencing a statement by an individual that no TDS should be deducted. The response clarified that, according to the Income Tax Act, 1961, specifically section 9(1)(i) - explanation 1(b), income from operations confined to purchasing goods in India for export does not accrue to non-residents. This supports the initial statement, confirming that no TDS is required in such cases.