What is Section 195 under Income Tax Act?

In this part of our TDS series, we will discuss the concept of Section 195 of the tax deduction, which is-

Section 195: TDS on Other Payments Made to NR (Individual) or Foreign Company

  • Who is required to deduct TDS u/s 195?

Any person (resident or non-resident) who pays any sum other than salary to a non-resident is required to deduct tax under this section.

  • What is the rate & time of tax deduction u/s 195?        

The rate of tax deduction u/s 195 shall be either of the below rates whichever is beneficial to you :

  1. Specified in the Double Taxation Avoidance Agreements between India and the country of the payee.
  2. Specified in the Income Tax Act.

Further, if the payee doesn’t have a PAN then rate could be rate as per the law in force or 20% whichever is higher.

  • No Requirement of TDS :

No such exemption is provided in this section.


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