Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ----
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    Retrospective Cancellation of GST Registration: Analysis of Delhi High Court’s Ruling in 2024 (1) ...
    Case LawsIncome Tax
    Deciphering Tax Implications on Capital Reduction: Navigating the Complexities of Section 115QA in I...
    Case LawsCustoms
    Navigating Regulatory Compliance: Analysis of a CHA License Revocation and Restoration Case
    Case LawsIncome Tax
    Interpreting Section 153A: ITAT Delhi's Stand on Incriminating Material in Assessments: Assessments ...
    Case LawsIncome Tax
    Reaffirming the Bounds of Section 153A: Analysis of Delhi High Court's Approach: Assessment post sea...
    Case LawsIncome Tax
    Navigating Rectification and Revised Returns: Legal Insights from ITAT Bangalore's Ruling
    Case LawsIncome Tax
    Mutual Fund Gains and Deemed Dividends: Analyzing the Delhi High Court's Landmark Judgment
    Case LawsCustoms
    Judicial Scrutiny of Customs Seizure and Redemption under the Indian Legal Framework: Foreign Curren...
    Case LawsCustoms
    The Duty of Diligence: Understanding the Legal Implications for Customs Brokers
    Case LawsCustoms
    Legal Analysis of a Customs Appeal Case Involving Mandatory Pre-Deposit Requirements
    Case LawsCentral Excise
    Legal Elucidation of Homeopathic Product Classification under Central Excise Tariff Act: Medicament ...
    The Supreme Court's In-Depth Ruling on Corporate Insolvency: Legal Implications Explored
    Money Laundering and Bail: Supreme Court's Interpretation of Section 45 PMLA
    Case LawsIncome Tax
    Reassessing Income under Section 147 Post-Quashment of Sections 153A/153C: The Waiver of Limitation ...
    Case LawsIncome Tax
    Section 153A of the Income Tax Act: A Critical Analysis of the Supreme Court's Interpretation in the...
    The Intersection of Politics, Corruption, and Judicial Review: A Case Study: Validity of order of Hi...
    Case LawsIncome Tax
    Clarity and Precision in Tax Penalty Proceedings: Insights from a High Court Judgment
    NCLAT's Authority to Recall Judgments: The Intersection of Tribunal Authority and Justice
    Detention and Release of Goods under CGST Act: Discrepancies in the CGST registration of the consign...
    The Detention of Goods under GST Law: Doubts regarding the genuineness of the consignee
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Case LawsGST
    Show AI Summary
    Retrospective GST cancellation: court limits retroactive effect, stressing objective grounds and hearing rights for taxpayers.
    The court held that retrospective cancellation of GST registration cannot be applied mechanically and must be supported by objective grounds; mere non-filing does not automatically justify cancelling registration for earlier compliant periods. Procedural fairness requires an opportunity of being heard before imposing retrospective cancellation, and the temporal effect of cancellation should align with the taxpayer's cancellation application rather than an earlier retrospective date, given potential impacts such as denial of input tax credit.
    Case LawsIncome Tax
    Show AI Summary
    Capital reduction transactions treated outside buyback levy when executed pre amendment; buyback tax not attracted.
    The Tribunal held that the capital reduction did not qualify as a buyback for purposes of the buyback tax provision because the transaction was completed before the amendment that broadened the provision's definition; relying on precedents distinguishing capital reduction from buybacks, the Tribunal rejected the revenue's tax avoidance contention and emphasised that the transaction date governs applicability of the amended definition.
    Case LawsCustoms
    Show AI Summary
    Non transferability of CHA license: unauthorized sub letting triggered revocation, later reconsidered due to appellant hardship.
    A licensed CHA was found to have contravened CHALR by effectively transferring operational control to a Mumbai office through a Power of Attorney, breaching non transferability, CHA obligations to obtain authorisations and exercise due diligence, and supervision duties over employees; the firm was held accountable where the licence was used for financial gain.
    Case LawsIncome Tax
    Show AI Summary
    Incriminating material requirement: Section 153A assessments require material specific to the assessee, not unrelated third party statements.
    Assessments following search operations must be grounded on incriminating material specifically linked to the assessee; material or statements derived from separate or third party search proceedings cannot, alone, serve as incriminating material against an unrelated assessee. Absent assesseespecific incriminating material, additions and disallowances in such assessments lack justification and cannot properly form the basis of adverse tax adjustments.
    Case LawsIncome Tax
    Show AI Summary
    Admissibility of search statements: corroborative evidence required before additions in post-search tax assessments.
    Statements recorded under Section 132(4) have evidentiary value but cannot alone justify additions under Section 153A; corroborative material discovered during the search is required, and taxpayers must be afforded the opportunity to cross-examine and rebut adverse statements before assessments under Section 153A are finalized.
    Case LawsIncome Tax
    Show AI Summary
    Rectification under Section 154: procedural lapses should not bar correction of apparent errors in tax returns.
    Interpretation of Section 154 treats misplacement of figures in an original return as a mistake apparent from the record, qualifying for statutory rectification; a revised return filed as a genuine corrective attempt may be recognised despite procedural lapses, and tax authorities should balance procedural compliance with the need to remedy apparent errors and assist taxpayers in claiming corrections.
    Case LawsIncome Tax
    Show AI Summary
    Classification of Mutual Fund Gains: affirmed as capital gains, clarifies tests distinguishing business income and scope of deemed dividends.
    Classification of gains from mutual fund redemptions turns on intent, transaction frequency, holding period, accounting treatment and the factual matrix to determine capital gains versus business income. Distinguishing genuine capital contributions from transactions that function as distributions is essential before treating receipts as deemed dividends; absent characteristics of a loan or advance against profits, capital infusions should not be recharacterised as dividends.
    Case LawsCustoms
    Show AI Summary
    Redemption under Customs Act: deemed payment recognized as exercising the redemption option despite pandemic-related delay.
    The judgment analyzes the redemption option under the Customs Act allowing fine payment in lieu of confiscation, focusing on the prescribed timeframe and on how actions by a petitioner while seized currency remains with the department can constitute exercise of that option. Considering pandemic-related disruption, the court applied purposive interpretation and concluded the department's refusal to accept a deemed payment was unjustified and that the petitioner's steps effectively availed the statutory redemption alternative.
    Case LawsCustoms
    Show AI Summary
    Duty to exercise due diligence: strict licensing compliance can justify administrative revocation and security forfeiture for brokers.
    The headnote focuses on the duty of diligence under the CBLR 2018, identifying failures to advise clients, to verify information, and to supervise employees as breaches that can attract administrative penalties against a customs broker's licence. It also confirms that regulatory action may be initiated at the broker's registered location regardless of where the underlying transactions occurred, and highlights the need for compliance programs, client advisory practices, and employee training.
    Case LawsCustoms
    Show AI Summary
    Mandatory pre-deposit requirement: payments made during investigation can be counted toward the appeal pre-deposit, protecting access to appeal.
    Interpretation of the pre-deposit requirement focuses on counting payments made during investigation toward the mandatory deposit for appellate admissibility; authorities must account for investigation-stage deposits when assessing compliance to avoid denying appeal rights on technical grounds and to give effect to substantive payment.
    Case LawsCentral Excise
    Show AI Summary
    Medicament classification confirmed for a homeopathic hair oil based on ingredients and ordinary perception under tariff law.
    Classification of a homeopathic hair oil as a medicament depends on the ingredients test and the common parlance test. The Tribunal treated AHAHO as a medicament because it contained recognised homeopathic constituents and was labelled under the homeopathic schedule; the Supreme Court affirmed that those medicinal ingredients and the product's perception as a homeopathic medicine outweigh cosmetic imagery and over the counter availability, and that tariff amendments did not change the classificatory result.
    Case LawsIBC
    Show AI Summary
    Resolution applicant eligibility under insolvency law can be disqualified by trust and company conflicts affecting CIRP participation.
    The judgment finds that valuation disclosures and newspaper publication of Form G met CIRP regulatory requirements despite website upload issues; materially revised resolution plans must be placed before the Committee of Creditors or are procedurally irregular; commercial wisdom of the CoC governs differential treatment of creditors subject to legal compliance; promoter settlement offers and Section 12-A applications require demonstrable CoC consideration; and resolution applicant eligibility is governed by Trusts Act and Companies Act conflicts, not by assumed disqualifications absent specific disqualification orders.
    Case LawsPMLA
    Show AI Summary
    Section 45 PMLA bail standard: stringent satisfaction required on non guilt and low risk of reoffence before granting bail.
    Interpretation of Section 45 PMLA requires a stringent bail standard: courts must be satisfied on reasonable grounds that the accused is not guilty and is unlikely to commit an offence while on bail. An Enforcement Directorate investigation under the PMLA is distinct from predicate offence inquiries, so completion of predicate investigations does not substitute for the specific assessment required under the PMLA; courts must therefore evaluate the seriousness of allegations and the stage and character of the ED probe when considering bail.
    Case LawsIncome Tax
    Show AI Summary
    Reopening assessments under Section 147 requires proper review when Section 150(2) waiver is contested, not clarification.
    Reopening of assessments under Section 147 concerns whether the Assessing Officer has a reason to believe that income has escaped assessment and is subject to procedural safeguards including issuance of a statutory notice. Where prior assessments made in consequence of a search under provisions for search-based assessment were quashed, the question arises whether fresh proceedings may be initiated for income not arising from incriminating material found in the search and whether the limitation period can be waived under Section 150(2) to permit issuance of a notice for reassessment.
    Case LawsIncome Tax
    Show AI Summary
    Scope of assessment post-search: completed assessments permit additions only from incriminating material found during searches.
    The Supreme Court clarified that for assessments completed before a search, the Assessing Officer's power to reassess within the retrospective period is constrained: any additions in such completed assessments must be based on incriminating material discovered during the search, thereby limiting use of search powers to matters tied to the unearthed evidence and preventing expansion of assessments on unrelated material.
    Case LawsPMLA
    Show AI Summary
    Judicial oversight of criminal investigations must be cautious to avoid unwarranted de novo probes that disrupt investigative progress.
    The commentary critiques a High Court-ordered de novo investigation into recruitment corruption, treating such measures as extraordinary remedies that should not unsettle substantial prior investigative work. It stresses judicial discipline and adherence to precedent, warns against collusion and political interference in inquiries, recognises expanded locus standi for third parties in complex cases, affirms confidentiality of confession material with limited exceptions, and outlines the Enforcement Directorate's powers in probing and recovering proceeds of money laundering.
    Case LawsIncome Tax
    Show AI Summary
    Specificity in penalty notices: requirement to identify exact charge prevents defective proceedings and safeguards procedural fairness.
    Applicability of penalty for concealment or furnishing inaccurate particulars requires the assessing officer to specify the exact limb under which proceedings are initiated; absence of that specificity renders the penalty notice defective, undermines procedural fairness, and justifies setting aside the penalty, thereby obliging tax authorities to adhere to precise notice requirements when invoking penal provisions.
    Case LawsIBC
    Show AI Summary
    Inherent jurisdiction to recall judgments affirms tribunals can correct proceedings tainted by procedural vitiation or jurisdictional defect.
    The tribunal recognised its inherent jurisdiction to recall judgments distinct from review, holding that recall is available where procedural vitiation, fraud, lack of jurisdiction or failure of natural justice renders a proceeding a nullity. Drawing on the tribunal rules analogue to residual civil-procedure power and higher-court authority, the tribunal treated recall as an incidental order to prevent abuse of process and to correct proceedings affected by jurisdictional defect or gross procedural lapse.
    Case LawsGST
    Show AI Summary
    Detention and release under Section 129: proper tax invoice and e way bill establish owner status and permit release.
    Where goods intercepted in transit show a proper tax invoice and a valid e way bill identifying the consignor/consignee, those documents establish ownership for purposes of Section 129 and direct application of the release provision applicable when the owner comes forward; documentary compliance thus determines which release regime applies where GST registration discrepancies are alleged.
    Case LawsGST
    Show AI Summary
    Detention of goods under GST: enforcement must assess consignee genuineness and documentary compliance before imposing penalties.
    Detention of goods in transit was contested where authorities suspected the consignee's genuineness despite production of a tax invoice and an E way bill; the Court directed that enforcement action distinguish between penalty provisions and alternative statutory mechanisms, require strict procedural fairness, assess documentary evidence and consignee identity, and remit the matter for fresh administrative consideration accordingly.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Grossing Up Mechanisms in Indian TDS Law : Clause 393(10) of the Income Tax Bill, 2025 Vs. Section 195A of the Income-tax Act, 1961

      25 June, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Clause 393 Tax to be deducted at source.

      Income Tax Bill, 2025

      Introduction

      Clause 393(10) of the Income Tax Bill, 2025 introduces a critical provision governing the mechanism for deduction of tax at source (TDS) where the payer agrees to bear the tax liability on behalf of the payee. This provision is a direct successor to the existing Section 195A of the Income-tax Act, 1961, which similarly addresses the concept of "grossing up" income when payments are made on a net-of-tax basis. The principle underlying both provisions is that, for the purposes of TDS, the income on which tax is to be deducted must be increased to such a level that, after deducting the tax, the net amount matches the contractual obligation to the payee.

      This commentary provides a detailed examination of Clause 393(10), its objectives, interpretative nuances, practical implications, and a comparative analysis with Section 195A of the 1961 Act. The analysis also considers relevant legal principles, administrative practice, and the broader context of TDS compliance in India.

      Objective and Purpose

      The legislative intent behind Clause 393(10)-as with Section 195A-is to ensure that the tax base is not eroded in cases where the payer assumes the tax liability of the payee. The provision is rooted in the anti-avoidance principle: if a payer agrees to pay an amount "net of tax" to a payee, the actual income of the payee (for tax purposes) is not the net amount received, but the gross amount that would result in the net receipt after TDS. This prevents manipulation of the tax base and ensures that the correct amount of tax is deducted and remitted to the exchequer.

      Historically, the need for such a provision has arisen in cross-border transactions, contracts with non-residents, and certain high-value domestic arrangements, where payees demand a fixed net receipt and the payer undertakes the obligation to settle the tax. Without a grossing-up mechanism, the effective TDS would be on a lower base, leading to a shortfall in tax collection.

      Detailed Analysis of Clause 393(10) of the Income Tax Bill, 2025

      Text of Clause 393(10)

      "In a case other than that referred to in section 392(2)(a), where under an agreement or an arrangement, if the tax chargeable on any income of the recipient referred to in this Chapter is to be borne by the payer, then, for the purposes of deduction of tax, the income shall be increased to an amount which after deduction of tax as per provisions of this Chapter becomes equal to the net amount payable under such agreement or arrangement."

      Key Elements of Clause 393(10)

      1. Scope of Application: The clause applies broadly to any payment subject to TDS under Chapter 393, except for cases covered by section 392(2)(a) (which deals with specific salary-related scenarios).
      2. Agreement or Arrangement: The trigger is the existence of an agreement or arrangement where the payer undertakes to bear the tax liability of the recipient/payee.
      3. Grossing Up Mechanism: The income is to be "increased to an amount" such that, after TDS at the applicable rate, the net amount matches the contractual (net) payment to the payee.
      4. Purpose: The grossed-up amount is the base for TDS, ensuring the intended net payment is achieved after tax deduction.

      Interpretative Considerations

      • Wording Consistency: The language of Clause 393(10) closely mirrors Section 195A, with a minor refinement to refer to "income of the recipient referred to in this Chapter." This clarifies that the clause applies to all TDS-triggering payments under the new regime, not just those previously covered.
      • Exclusion of Salary Cases: By expressly carving out section 392(2)(a), the clause avoids overlap with the specialized TDS provisions for salary, which have their own grossing-up rules.
      • Computation Formula: The grossing-up calculation is implicit but well-established in administrative practice and jurisprudence. If Net Amount is payable and the TDS rate is r%, the grossed-up amount G is computed as:
        G = Net Amount / (1 - r%)
      • Applicability to Residents and Non-Residents: The clause, by reference to "income of the recipient referred to in this Chapter," applies to both residents and non-residents, covering all payments where TDS is applicable and the payer assumes the tax burden.
      • Interaction with Double Taxation Avoidance Agreements (DTAAs): Where a DTAA prescribes a lower rate, the grossing-up is to be done at the DTAA rate, as the "rate in force" for TDS is determined by the Act or the applicable treaty, whichever is more beneficial to the taxpayer.

      Illustrative Example

      Suppose an Indian company agrees to pay a foreign consultant a net fee of Rs. 1,00,000, with the company bearing the tax liability. If the applicable TDS rate is 10%, the grossed-up amount would be:

      Gross amount = Rs. 1,00,000 / (1 - 0.10) = Rs. 1,11,111
      TDS = Rs. 11,111
      Net amount to payee = Rs. 1,00,000

      Ambiguities and Potential Issues

      • Multiple Rates and Surcharges: The presence of surcharge and cess can complicate the computation. The "rate as per provisions of this Chapter" must be interpreted to include all applicable add-ons.
      • Composite Payments: In cases where a single payment includes multiple components (some taxable, some not), the grossing-up should only apply to the taxable portion.
      • Foreign Exchange Fluctuations: In cross-border transactions, currency fluctuations between the date of agreement and payment can create discrepancies in net receipts.
      • Dispute on Net-of-Tax Clauses: The existence and enforceability of a net-of-tax clause can sometimes be disputed, especially if the contract is ambiguous or silent on tax treatment.

      Practical Implications

      For Payers

      • Increased Cost: Where the payer agrees to bear the tax, the effective cost of the transaction increases, as the gross payment (including tax) is higher than the contractual net amount.
      • Compliance Burden: Accurate computation, documentation, and disclosure of grossed-up amounts are essential. Errors can lead to short deduction, interest, and penalties.
      • Contract Drafting: Parties must clearly specify whether amounts are net or gross of tax and who bears the tax liability.

      For Payees

      • Tax Credit: The payee is deemed to have received the grossed-up amount and can claim TDS credit accordingly, even if the net cash received is lower.
      • Income Reporting: The grossed-up amount must be reported as income in the tax return, aligning with the TDS certificate (Form 16A or equivalent).

      For Tax Authorities

      • Revenue Protection: The clause safeguards the tax base, ensuring that the government receives tax on the full amount intended to accrue to the payee.
      • Audit and Enforcement: Authorities scrutinize contracts and payments to detect under-grossing or misapplication of rates, especially in cross-border or related-party transactions.

      Comparative Analysis with Section 195A of the Income-tax Act, 1961

      Text of Section 195A

      "In a case other than that referred to in sub-section (1A) of section 192, where under an agreement or other arrangement, the tax chargeable on any income referred to in the foregoing provisions of this Chapter is to be borne by the person by whom the income is payable, then, for the purposes of deduction of tax under those provisions such income shall be increased to such amount as would, after deduction of tax thereon at the rates in force for the financial year in which such income is payable, be equal to the net amount payable under such agreement or arrangement."

      Similarities

      • Substance: Both provisions impose the obligation to gross up the income where the payer assumes the tax liability.
      • Exclusion of Salary Cases: Both carve out salary TDS scenarios, which have separate grossing-up provisions.
      • Trigger: Both are triggered by an agreement or arrangement to pay net of tax.
      • Computation: Both require the income to be increased such that, after TDS, the net amount matches the contractual payment.

      Differences and Evolution

      • Wording and Scope: Clause 393(10) refers to "income of the recipient referred to in this Chapter," aligning with the broader and more structured TDS regime under the Bill. Section 195A refers to "income referred to in the foregoing provisions of this Chapter," which, while functionally similar, is less precise.
      • Reference to Salary Provisions: Clause 393(10) refers to section 392(2)(a), while Section 195A refers to section 192(1A). This is merely a renumbering and updating consistent with the new Bill's structure.
      • Integration with TDS Tables: Clause 393(10) is embedded within a comprehensive, tabular TDS framework, whereas Section 195A operates in a more fragmented legislative environment.
      • Clarity of Application: The new clause, by referencing the entire Chapter and its tables, clarifies that grossing-up applies across all TDS scenarios, not just those previously litigated or administratively recognized.

      Judicial and Administrative Interpretation

      • Case Law: Courts have consistently held that Section 195A is a mandatory provision; where the payer agrees to bear the tax, grossing-up is not optional. The same principle will apply under Clause 393(10).
      • CBDT Circulars: The Central Board of Direct Taxes (CBDT) has issued clarifications on computation methodology, especially regarding inclusion of surcharge and cess in the grossing-up calculation.
      • Interaction with DTAAs: Courts have held that the grossing-up must be done at the beneficial DTAA rate, if applicable.

      Practical Examples under Both Regimes

      The computation process remains unchanged:

      • u/s 195A: If a net payment of Rs. 1,00,000 is to be made and the TDS rate is 10%, the grossed-up amount is Rs. 1,11,111.
      • Under Clause 393(10): The same computation applies, but the base for grossing-up is more clearly defined by the new tables and thresholds.

      Potential Issues and Ambiguities

      • Multiple TDS Provisions: The new Bill's tabular structure may lead to questions about which TDS entry applies, but once identified, Clause 393(10) applies uniformly.
      • Transition Issues: During the shift from the 1961 Act to the new Bill, contracts referencing the old law may require renegotiation or clarification.

      Comparative Table

      AspectSection 195A of the Income-tax Act, 1961Clause 393(10) of the Income Tax Bill, 2025
      TriggerAgreement/arrangement to pay net of taxSame
      ScopeAll TDS under Chapter XVII-B except salary (192(1A))All TDS under Chapter 393 except salary (392(2)(a))
      Grossing-up CalculationAt "rates in force" for the relevant FYAt "rates as per provisions of this Chapter" (including tables and notes)
      Inclusion of Surcharge/CessYes, as per administrative guidanceYes, by express reference to "rates as per provisions"
      Reference to DTAAsYes, if beneficialYes, as per "rates as per provisions"
      Clarity of ApplicationSome ambiguity due to scattered TDS provisionsHigher clarity due to integrated TDS tables

      Conclusion

      Clause 393(10) of the Income Tax Bill, 2025, faithfully carries forward the legislative intent and operational mechanics of Section 195A of the Income-tax Act, 1961, while providing greater clarity and integration with the new TDS framework. Its primary function is to ensure that the government's tax base is preserved whenever a payer agrees to make a net-of-tax payment, by mandating grossing-up of the income before TDS. The provision is crucial for both domestic and cross-border transactions, and its correct application is essential for compliance, revenue protection, and avoidance of disputes.

      While the substance remains unchanged, the new Bill's structure and language enhance clarity, reduce ambiguity, and align the TDS regime with contemporary legislative drafting standards. Stakeholders must continue to exercise diligence in contract drafting, computation, and documentation to ensure seamless compliance with the grossing-up requirement.


      Full Text:

      Clause 393 Tax to be deducted at source.

      Topics

      ActsIncome Tax