Sunday, February 21, 2010

TDS u/s 195: Samsung Electronics appeal in the Supreme Court

We have discussed the issue of TDS u/s 195 of the Income Tax Act, 1961 a few times earlier; and have also discussed a recent judgment of the Karnataka High Court in Samsung Electronics. The decision holds that deduction must be made u/s 195 on all sums paid to a non-resident, irrespective of the chargeability of the sum.s As was argued in the earlier posts, this view merits reconsideration. In a development which will give some hope to taxpayers, the Supreme Court has issued notice to the Department on the SLP filed by Samsung Electronics. However, the Bench of Justice Kapadia and Justice Swatanter Kumar has not stayed the judgment of the High Court at this juncture. Final hearings in the matter are scheduled in August 2010. The latest order of the Supreme Court can be downloaded from this link.

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