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Taxsutra – Only Markup under Manpower Supply Agreement Subject to Withholding, not Salary Reimbursement, holds Indian Income Tax Appellate TribunalDec-27-2018

In a recent decision, the Indian Income Tax Appellate Tribunal held that withholding of taxes under section 195 of the Indian income tax was rightfully restricted by the payer to the markup portion of the consideration received under a manpower supply agreement. The Tribunal held that the remaining payment was only salary reimbursement to seconded employees, not subject to withholding.