Remittances to non-residents - TDS - RBI instructions
RBI clarifies that
1. any person responsible for making payment to a non-resident or to a foreign company, any interest or any other sum chargeable under the IT Act, shall at the time of payment or credit of the amount deduct Income Tax thereon at the rate in force.
2. Section 195 of the IT Act is not limited to interest income and it takes into account business income also.
3. Accordingly, a remitter of foreign exchange is required to submit to the authorised dealer, an undertaking and Chartered Accountant's certificate in the format prescribed by CBDT vide circular No. 10/2002 dated October 9, 2002 at the time of making the remittance in foreign exchange to non-residents including remittances which are in the nature of trade transactions such as import payments.
RBI CIRCULAR NO. 03/RBI., Dated: July 19, 2007