India: Tax withheld (deducted) at source guidance

India: Tax withheld (deducted) at source guidance

The KPMG member firm in India has prepared reports describing the following developments (read more at the hyperlinks provided below).

Related content

  • Revised guidelines for “stay of demand” when case is before CIT(A): To streamline the process for granting a stay and for standardise the lump-sum payment required of a taxpayer as a pre-condition for the “stay of demand” in matters disputed before Commissioner of Income-tax (Appeal) [CIT(A)], the Central Board of Direct Taxes issued revised guidelines concerning the “stay of demand” at the CIT(A) stage. Read a March 2016 report [PDF 300 KB]
  • Tax withheld at source, payments by broadcasters and television channels to production houses, television channels, publishing houses, advertisement companies: The Central Board of Direct Taxes (CBDT) issued guidance clarifying that when content is produced pursuant to specifications provided by a broadcaster / telecaster and the copyright of the content program is also transferred to the broadcaster / telecaster, the contract is covered within the definition of “work” under section 194C of the Income-tax Act, 1961. Thus, this is subject to tax withholding (deduction) at source. If, however, the broadcaster / telecaster acquires only the broadcasting / telecasting rights of the content that is already produced by the production house, there is no contract for “carrying out any work,” and the payments are not subject to withholding at source. A second guidance from CBDT clarifies that the withholding of tax at source is not required on payments made by television channels / newspaper companies to an advertising agency for booking or procuring of or canvassing for advertisements.  Read a March 2016 report [PDF 324 KB]
  • CBDT clarifies taxability of surplus on sale of shares and securities: Guidance clarifies the issue of taxability of surplus on sale of shares and securities. Read a March 2016 report [PDF 298 KB]
  • When tax treaty benefits apply, the 20% tax withheld at source does not apply: The Bangalore Bench of the Income-tax Appellate Tribunal held that the “tax withholding at source” provisions must be read in conjunction with the terms of an income tax treaty in order to determine the tax liability on a particular sum. When the payment recipient is eligible for the benefit of the tax treaty, the 20% tax withholding rate under section 206AA of the income tax law does not apply. The case is: Wipro Ltd. Read a March 2016 report [PDF 314 KB]

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