TDS not applicable on commission to NRI agents procuring foreign customers
In a recent case, AO made disallowance u/s 40(a)(i) for not deducting TDS on commission paid to non-resident agent for procuring foreign customers. CIT(A) also upheld the disallowance.
On further appeal, the Hon’ble ITAT appreciated our submissions that the NRI agent has no PE or business connection in India and the services were rendered wholly outside India, thus not attracting any tax on commission in India. Since the agent’s income was not taxable in India, there is no obligation to deduct TDS on such payment.
The copy of the order is as under:
