TAXATION OF ROYALTY AND FEES FOR TECHNICAL SERVICES – 2

Download a copy of this Document in PDF.

Section 44DA is a special provision for computing income by way of royalty or fees for technical services having a Permanent Establishment, etc.

Sl. No. CRITERIA CONDITIONS
1 Eligible Assessee (i) a Non-Resident (not being a company) or a Foreign Company; and

(ii) carries on business in India

(a) through a Permanent Establishment (PE) in India or

(b) performs professional services from a fixed place of profession in India

and the right, property, contract in respect of which the royalties or fees for technical services are paid is effectively connected with such PE or fixed place of profession, as the case may be.

2 Eligible Income The Income by way of royalty of fees for technical services received from Government or Indian Concern in pursuance of an agreement made by NR or FC with Govt of Indian Concern after the 31st day of March, 2003.
3 Computation of Profits The computation of profits under the head “Profits and gains from business or profession” in respect of such Assessee shall be done in accordance with provisions of the Income Tax Act, 1961 (Sections 28 to 43D)
4 Deductions No deduction shall be allowed –

(i) in respect of any expenditure or allowance which is not wholly and exclusively incurred for the business of such PE or fixed place of profession in India; or

(ii) in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by PE to its head office or to any of its offices.

5. Accounts and Audit Accounts u/s 44AA are required to be maintained.

Accounts are required to be Audited by a Chartered Accountant.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s