TDS on foreign artists in India

Hi Naresh,

If we refer to the Income tax Act alone, it'd seem the income of aforeign artist performing in India is taxable here. But we can'tdetermine the taxability of income of a foreigner in India withoutconsulting the DTAA India has with her country. Services rendered bya performing artist amount to "Independent Personal Services" asreferred to in the DTAA. I quote below the relevant Article of theIndia-Australia DTAA:[ARTICLE XIV - Independent personal services - 1. Income derived byan individual or a firm of individuals (other than a company) who isa resident of one of the Contracting States in respect ofprofessional services or other independent activities of a similarcharacter shall be taxable only in that State unless :(a) the individual or firm has a fixed base regularly available tothe individual or firm in the other Contracting State for thepurpose of performing the individual's or the firm's activities, inwhich case the income may be taxed in that other State but only somuch of it as is attributable to activities exercised from thatfixed base; or(b) the stay by the individual or, in the case of a firm, by one ormore members of the firm (alone or together) in the otherContracting State is for a period or periods amounting to orexceeding 183 days in a year of income, in which case only so muchof the income as is derived from the activities of the individual,that member or those members, as the case may be, in that otherState may be taxed in that other State.2. The term "professional services" includes services performed inthe exercise of independent scientific, literary, artistic,educational or teaching activities as well as in the exercise of theindependent activities of physicians, surgeons, lawyers, engineers,architects, dentists and accountants.]So unless the Australian artist coming down to perform in India hassome sort of a permanent base here, her income can't be taxed inIndia. It'd be taxed in Australia only. The relevant clause in theIndo-UK DTAA reads virtually the same, except the period of stay inIndia before their income from performances in India becomes taxablehere, in the case of the UK, is 90 days.So, income of the English and Australian artists coming to India forgiving performances won't be taxable in India by virtue of theprovisions of the DTAA India has with these countries. I don't knowwhere you got the TDS rate of 10% from. This is the rate prescribedu/s 194J for making TDS on payments to professionals, who areRESIDENTS. And those artists aren't resident in India. If at all TDSwould be applicable here, Section 195 would be the governingsection.Thanks,CA Sanjeev Bedi--- In ICAI_CIRC_MEERUT_CA@yahoogroups.com, "CA.Naresh" wrote:>> Dear All>> My client is into Event mamngement. He wants to bring dome foreignArtist from Australia and U.K to perform in India for a week. He hasenquired about the TDS liability .>> In my view TDS shall be deducted @10% plus sc & cess. However myclient says that the professionals are not willing to deduct TDS asthere is no tax on them in their country.>> Please give your views if there is anyway out or can they claimrefund on account of DTAA.>