Topic

Section 40(a)(i)

3 articlesLatest June 2026
Section 195 & Section 40(a)(i) | 'Make Available' Test Not Met for Onsite Software Services by US Contractors: ITAT Bangalore
|Income Tax Appellate Tribunal

Section 195 & Section 40(a)(i) | 'Make Available' Test Not Met for Onsite Software Services by US Contractors: ITAT Bangalore

Payments for onsite software services to foreign entities do not attract TDS under Section 195 unless the assessee gains access to proprietary technical knowledge or know-how. ITAT Bangalore clarifies that mere presence of foreign personnel in India for implementation or support does not satisfy the 'make available' condition, significantly narrowing the scope of deemed fees for technical services and offering relief to IT firms relying on global onsite teams.

Economic Employer Test | TDS Liability on Seconded Staff Requires Deduction Under Section 195; Reimbursement Not Automatic Exemption : ITAT Bangalore
Case Law Analysis
|Income Tax Appellate Tribunal

Economic Employer Test | TDS Liability on Seconded Staff Requires Deduction Under Section 195; Reimbursement Not Automatic Exemption : ITAT Bangalore

The ITAT Bangalore ruled that reimbursement of salaries to group companies for seconded employees triggers TDS obligations under Section 195 if the Indian entity functions as the economic employer, regardless of cost-to-cost accounting. This clarifies that inter-company cost recovery does not override the substance-over-form principle in cross-border secondments, impacting multinational corporations with shared staffing models.

Section 9(1)(vii) & India-Singapore DTAA | Project-Specific Design Services Not Taxable as Fees for Technical Services : ITAT Mumbai
Case Law Analysis
|Income Tax Appellate Tribunal

Section 9(1)(vii) & India-Singapore DTAA | Project-Specific Design Services Not Taxable as Fees for Technical Services : ITAT Mumbai

ITAT Mumbai rules that payments for project-specific architectural and structural design services to Singapore entities do not qualify as Fees for Technical Services under the India-Singapore DTAA, exempting them from TDS under Section 195. The ruling clarifies the scope of FTS, preventing disallowance under Section 40(a)(i) for real estate developers and similar businesses.

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