Today's case
Income Tax – Reimbursement of part salary is not Revenue Receipt – No TDS – ARA
In an important decision, the ARA yesterday ruled - Indo-Korea DTAA - agreement to promote
insurance business of each other - non-resident provides technical staffer for the purpose - applicant partly pays for salary - though provision of services of technical personnel is covered u/s 9(1)( vii) and also DTAA but no tax is deductible in India as reimburement of part salary cannot be treated as revenue receipt.
The Applicant, an Indian company, soght advance ruling broadly on the question whether it is obliged to deduct tax at source for the payments made to Hyundai Marine & Fire Insurance Co. Ltd. Korea (HMFICL) from time to time in connection with the ‘Secondment Agreement' entered into between them. Under that agreement, the services of Mr Shin Bong In, who was an employee of HMFICL at Korea were kept at the disposal of the applicant for a period of two years in order to assist the applicant in matters relating to Korean insurance business.
We bring you this [yesterday's] Ruling today.