The issue is that should TDS be deducted for a payment to a foreigner having no PE (permnanent establishmnent in India) for the display of a newsletter on a website.
The problem is that the of the newsletter hosting agency and its servers are outside India. However, the users of the newsletter are scattered all over the world.
A question arises whether to deduct TDS on making payment to the Non-resident since some users of the newsletter are located in India.
No TDS on Payments to Foreign Entity for Hosting Services Rendered Outside India, No Taxable Income in India. A query was raised regarding the applicability of Tax Deducted at Source (TDS) on payments made to a foreign entity for hosting a newsletter on a website, with users including those in India. The foreign entity has no permanent establishment in India, and its servers are located outside India. The response clarified that since the hosting services are rendered outside India and there is no direct service link to India, the payments to the foreign entity should not attract TDS, as there is no taxable income generated within India. (AI Summary)
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