TDS on non-resident payments can disallow business deductions when tax is not deducted or paid on time. Non-compliance with TDS obligations on payments to non-residents other than salary leads to disallowance of the related expenditure where tax is required to be deducted and is not deducted, or is deducted but not paid within the prescribed time. The rule applies to interest, royalty, fees for technical services and other taxable sums paid outside India or to a non-resident or foreign company in India, with deduction allowed in the year tax is actually paid if compliance occurs later.