Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: due date for vat payment :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD :: list of goods taxed at 4% :: TDS :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: cpt :: form 3cd :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India
« News Headlines »
 7 Tax-saving investments for the risk averse
 5 Tax tasks you should complete before March 31
 March 31 deadline nears: Check out these last-minute tax-saving investment options
 How to file income tax returns online without having Form 16 in 10 simple steps
 Deadline For Filing Income Tax Return (ITR) Is Just 11 Days Away: 10 Latest Details To Know
  10 incomes you need not pay any tax on
 How To File Income Tax Returns In Three Steps By March 31, 2018
 10 things about income tax every taxpayer should know
 What to do if your TDS is not deposited with the government
 What if you forget to verify your Income Tax return?
 TDS on rent and other tax tasks to complete before March 31

Salary paid abroad to attract income tax
August, 29th 2006
Multinational companies adopt a uniform policy in respect of their employees salaries. In many cases, employees are transferred from one country to another. Therefore, there has to be continuity and consistency in their remuneration, despite different local tax laws and social security regulations. In many cases, expatriate employees are paid a part of their remuneration outside India. But even the part of remuneration paid outside India, on which tax at source should be deducted, is taxable in India. Where the tax is not deducted at source, the consequences are as under:- The employer responsible for deducting the tax at source shall be liable to pay the amount short-deducted or not deducted, along with interest, under Section 201 of the Act. In addition to paying the short-deducted tax, the employer may also be liable to pay, by way of penalty, a sum equal to the amount of tax which it failed to deduct or pay to the government of India. In principle, the remuneration to expatriate employees for services rendered in India is acceptable as allowable deduction in computing the profits attributable to Indian operations. But no deduction will be permissible under Section 40 (A) (I) unless the tax is deducted at source and paid to the government. However, Section 273 B provides that no penalty shall be imposed for the failure to deduct the tax at source if it is proved that there was reasonable cause for the said failure. In the context of what is a reasonable cause, reference is invited to the Commissioner of Income-tax versus Itochu Corporation. M/s. Itouch Corporation, a company incorporated in Japan, had a liaison office in Delhi. Japanese employees working in the Delhi office were paid a part of their salary outside India. However, neither was the same reflected in the return, nor were the taxes deducted at source. After a notice was issued, the company filed revised computation for different periods showing the amount paid to the employees in Japan. The company also paid the amount which was short-deducted. Thereafter, proceedings under Section 271C of the Income-tax Act, 1961, came to be initiated and the assessing officer imposed a penalty on the company for the failure to deduct the tax at source. The tribunal deleted the penalty by observing: After examining the ratios of the various case laws, referred to above and the facts of this case, we are of the opinion that there was a reasonable cause for not deducting the tax at source on account of emoluments paid to the expatriate employees outside India and hence no penalty under section 271C is exigible by the alleged default. The decision of the tribunal was upheld by the Delhi High Court. The above principle was upheld in a recent case of Commissioner of Income-tax versus NHK Japan Broadcasting Corporation. A careful reading of the above cases will show that penalty leviable for non-deduction of tax at source can be avoided if the employer readily pays the tax, files a revised return and co-operates with the tax department. H P Agrawal
Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions