{"id":28513,"date":"2025-02-01T17:10:12","date_gmt":"2025-02-01T11:40:12","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=28513"},"modified":"2025-12-10T22:54:36","modified_gmt":"2025-12-10T17:24:36","slug":"itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/","title":{"rendered":"ITR to be filed by non-residents in case earning royalty\/FTS"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69db081bcf206\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69db081bcf206\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#Impact_on_ITR_has_to_be_filed_by_non-residents_in_the_case_earning_royaltyFTS_income\" title=\"Impact on ITR has to be filed by non-residents in the case earning royalty\/FTS income\">Impact on ITR has to be filed by non-residents in the case earning royalty\/FTS income<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#Income_tax_return_filing_requirement_under_Sec_115A5\" title=\"Income tax return filing requirement under Sec 115A(5):\">Income tax return filing requirement under Sec 115A(5):<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#Withholding_tax_obligations_under_Indian_tax_laws_for_both_resident_and_non-resident_entities\" title=\"Withholding tax obligations under Indian tax laws for both resident and non-resident entities\">Withholding tax obligations under Indian tax laws for both resident and non-resident entities<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#WHT_for_Payments_to_Resident_Companies\" title=\"WHT for Payments to Resident Companies:\">WHT for Payments to Resident Companies:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#WHT_for_Payments_to_Non-Resident_Companies\" title=\"WHT for Payments to Non-Resident Companies:\">WHT for Payments to Non-Resident Companies:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#Tax_Treaty_Rates\" title=\"Tax Treaty Rates:\">Tax Treaty Rates:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#Applicability_of_TDS_on_Interchange_Fees_and_Payment_Gateway_Charges\" title=\"Applicability of TDS on Interchange Fees and Payment Gateway Charges\">Applicability of TDS on Interchange Fees and Payment Gateway Charges<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#CBDT_Clarification_%E2%80%93_Notification_Exempting_Interchange_Fees\" title=\"CBDT Clarification \u2013 Notification Exempting Interchange Fees\">CBDT Clarification \u2013 Notification Exempting Interchange Fees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#Not_a_CommissionBrokerage_Section_194H_Not_Attracted\" title=\"Not a Commission\/Brokerage : Section 194H Not Attracted\">Not a Commission\/Brokerage : Section 194H Not Attracted<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#RBI_Guidelines_Reinforce_Independent_Role_of_Gateways\" title=\"RBI Guidelines Reinforce Independent Role of Gateways\">RBI Guidelines Reinforce Independent Role of Gateways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#Key_Judicial_Rulings_%E2%80%93_Including_Landmark_ITAT_Ruling_2025\" title=\"Key Judicial Rulings \u2013 Including Landmark ITAT Ruling (2025)\">Key Judicial Rulings \u2013 Including Landmark ITAT Ruling (2025)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#Industry_Practice_Supported_by_Law_Based_on_CBDT_RBI_and_ITAT_clarifications\" title=\"Industry Practice Supported by Law :\u00a0Based on CBDT, RBI, and ITAT clarifications:\">Industry Practice Supported by Law :\u00a0Based on CBDT, RBI, and ITAT clarifications:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/itr-to-be-filed-by-non-residents-in-case-earning-royalty-fts\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-25865\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/12\/Income-Tax-Return-Form-ITR-1-ITR-4-notified-for-AY-2024-25.jpg\" alt=\"Income Tax Return Form ITR 1 &amp; ITR 4 notified for AY 2024-25\" width=\"1200\" height=\"675\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/12\/Income-Tax-Return-Form-ITR-1-ITR-4-notified-for-AY-2024-25.jpg 1200w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/12\/Income-Tax-Return-Form-ITR-1-ITR-4-notified-for-AY-2024-25-300x169.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/12\/Income-Tax-Return-Form-ITR-1-ITR-4-notified-for-AY-2024-25-1024x576.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/12\/Income-Tax-Return-Form-ITR-1-ITR-4-notified-for-AY-2024-25-768x432.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2023\/12\/Income-Tax-Return-Form-ITR-1-ITR-4-notified-for-AY-2024-25-800x450.jpg 800w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Impact_on_ITR_has_to_be_filed_by_non-residents_in_the_case_earning_royaltyFTS_income\"><\/span><span style=\"color: #000080;\"><strong>Impact on ITR has to be filed by non-residents in the case earning royalty\/FTS income<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>key implications of the Section 115A amendment and its impact on ITR filing for non-residents earning royalty\/FTS income:<\/p>\n<ul>\n<li>Amendment in Section 115A (2023): The withholding tax rate for fee for technical services (FTS) increased to 20% + surcharge + cess, making the effective rate 20.8%. This is significantly higher than the rates available under most Double Taxation Avoidance Agreements.<\/li>\n<li>Double Taxation Avoidance Agreements Benefit &amp; Lower Withholding Tax: Many tax treaties (e.g., with the US, UK, and Canada) provide a 15% tax rate. Other treaties (e.g., Belgium, Netherlands, Singapore) offer a 10% tax rate. And Non-residents prefer the Double Taxation Avoidance Agreements rate since it is lower than 20.8%.<\/li>\n<li>Sec 90(2) \u2013 More Beneficial Treatment: A non-resident taxpayer can choose between the domestic tax law (115A) or Double Taxation Avoidance Agreements, whichever is more beneficial. Since Double Taxation Avoidance Agreements rates are lower, non-residents opt for Double Taxation Avoidance Agreements<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Income_tax_return_filing_requirement_under_Sec_115A5\"><\/span><span style=\"color: #000080;\"><strong>Income tax return filing requirement under Sec 115A(5)<\/strong>:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Exemption from income tax return filing applies only if taxes are withheld at the 115A rate (20.8%). If Double Taxation Avoidance Agreement rates (10-15%) are applied, the non-resident must file an Income Tax Return Filling in India to report and validate the correct tax rate.<\/li>\n<li>Non-residents who claim a lower Double Taxation Avoidance Agreements rate for fees for technical services (FTS) must now file an income tax return in India. This ensures compliance with Indian tax laws and proper tax reporting.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Withholding_tax_obligations_under_Indian_tax_laws_for_both_resident_and_non-resident_entities\"><\/span><span style=\"color: #000080;\"><strong>Withholding tax obligations under Indian tax laws for both resident and non-resident entities<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Summary of withholding tax (WHT) obligations under Indian tax laws for both resident and non-resident entities. Here are the key points from the information provided:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"WHT_for_Payments_to_Resident_Companies\"><\/span><span style=\"color: #000080;\"><strong>WHT for Payments to Resident Companies:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Purchase of Goods: TDS applies on purchases exceeding INR 5 million at a rate of 0.1%.<\/li>\n<li>Specified Type of Interest: No threshold, tax rate 10% (reduced to 5% in some cases).<\/li>\n<li>Non-Specified Type of Interest: TDS applies on payments exceeding INR 5,000, taxed at 10%.<\/li>\n<li>Professional and Technical Services: Payments above INR 30,000 are subject to 10% (professional) and 2% (technical) withholding tax.<\/li>\n<li>Royalty and FTS: TDS of 10% applies for amounts above INR 30,000 (reduced to 2% for certain royalties).<\/li>\n<li>Perquisites and Dividends: Tax rate of 10% for perquisites above INR 20,000, dividends above INR 5,000.<\/li>\n<li>Payments on Property Transfers &amp; Other Transactions: Various rates, including 1% for property purchases above INR 5 million.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"WHT_for_Payments_to_Non-Resident_Companies\"><\/span><span style=\"color: #000080;\"><strong>WHT for Payments to Non-Resident Companies:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Interest on Foreign Currency Borrowings: TDS at 5%.<\/li>\n<li>Royalty and FTS: Tax rate is 20% (with exceptions for certain treaties).<\/li>\n<li>Capital Gains: Long-term capital gains taxed at 10% for equity shares on which STT is paid, 20% for others.<\/li>\n<li>Other Income: Tax rates range from 30% for gaming winnings to 35% for other income.<\/li>\n<li>No Threshold for Non-Residents: Withholding tax is applicable on all payments to non-residents without any minimum threshold.<\/li>\n<\/ol>\n<p><span style=\"color: #000080;\"><strong>Special Considerations:<\/strong><\/span><\/p>\n<ol>\n<li>Liberalized Remittance Scheme (LRS) &amp; Overseas Tour Packages: TCS on LRS for education\/medical reduced from 20% to 5%; 20% TCS applies on overseas tour package purchases beyond INR 700,000.<\/li>\n<li>A PAN is required for financial transactions exceeding INR 250,000. If the deductee does not provide PAN, withholding tax is applied at the higher of the relevant tax rate or 20%.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"Tax_Treaty_Rates\"><\/span><span style=\"color: #000080;\"><strong>Tax Treaty Rates:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Tax treaties between India and other countries may offer lower WHT rates. For example:<\/p>\n<ul>\n<li>Australia: Dividend 15%, Interest 15%, Royalty 10%\/15%, Technical Services 10%\/15%<\/li>\n<li>Mauritius: Dividend 5%\/15%, Interest 7.5%, Royalty 15%, Technical Services 10%<\/li>\n<\/ul>\n<h2 data-start=\"256\" data-end=\"330\"><span class=\"ez-toc-section\" id=\"Applicability_of_TDS_on_Interchange_Fees_and_Payment_Gateway_Charges\"><\/span><span style=\"color: #000080;\"><strong data-start=\"258\" data-end=\"330\">Applicability of TDS on Interchange Fees and Payment Gateway Charges<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-11637\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/12\/income-tax-1024x683-1.jpg\" alt=\"www.carajput.com; income tax Act, 1949-TDS\" width=\"1024\" height=\"683\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/12\/income-tax-1024x683-1.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/12\/income-tax-1024x683-1-300x200.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2020\/12\/income-tax-1024x683-1-768x512.jpg 768w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<p data-start=\"332\" data-end=\"612\"><em>tax deducted at source<\/em>\u00a0is generally <em data-start=\"351\" data-end=\"367\">not applicable<\/em> on interchange fees, payment gateway charges, or the merchant discount rate. This position is supported by the Central Board of Direct Taxes notifications, the Reserve Bank of India guidelines, and consistent judicial pronouncements, including a landmark The Income Tax Appellate Tribunal ruling in 2025.<\/p>\n<h3 data-start=\"619\" data-end=\"689\"><span class=\"ez-toc-section\" id=\"CBDT_Clarification_%E2%80%93_Notification_Exempting_Interchange_Fees\"><\/span><span style=\"color: #000080;\"><strong data-start=\"622\" data-end=\"689\">CBDT Clarification \u2013 Notification Exempting Interchange Fees<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"691\" data-end=\"799\">The Central Board of Direct Taxes issued Notification No. 47\/2016, F. No. 275\/53\/2012-IT(B) dated 17 June 2016, stating that No TDS shall be deducted on payments of interchange fees in respect of credit card or debit card transactions between acquiring banks and issuing banks.\u00a0This specifically exempts such payments from <em>tax deducted at source<\/em>\u00a0under Chapter XVII-B of the Income Tax Act. Interchange fees paid by banks, payment aggregators, or gateways are outside the TDS net.<\/p>\n<h3 data-start=\"1173\" data-end=\"1238\"><span class=\"ez-toc-section\" id=\"Not_a_CommissionBrokerage_Section_194H_Not_Attracted\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1176\" data-end=\"1238\">Not a Commission\/Brokerage : Section 194H Not Attracted<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1240\" data-end=\"1392\">Courts have held that merchant discount rate, interchange fee, or payment gateway charges do not constitute \u201ccommission\u201d or \u201cbrokerage\u201d u\/s 194H because there is no principal-agent relationship. The payment gateway\/acquirer operates on a principal-to-principal basis. Charges are merely service fees for enabling electronic payments.<\/p>\n<p data-start=\"1594\" data-end=\"1633\">Important Judicial Observations: <span style=\"font-size: 16px;\">Payment gateways and aggregators <\/span>do not collect money on behalf of merchants as \u201cagents.\u201d <span style=\"font-size: 16px;\">They provide <\/span>technology and processing infrastructure<span style=\"font-size: 16px;\">, not commission-based services.\u00a0<\/span>Therefore, Section 194H does not apply.<\/p>\n<h3 data-start=\"1873\" data-end=\"1936\"><span class=\"ez-toc-section\" id=\"RBI_Guidelines_Reinforce_Independent_Role_of_Gateways\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1876\" data-end=\"1936\">RBI Guidelines Reinforce Independent Role of Gateways<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"1938\" data-end=\"2074\">The Reserve Bank of India\u00a0Guidelines on Regulation of Payment Aggregators and Payment Gateways, issued via circular dated 17 March 2020, classify payment aggregators and payment gateways as\u00a0outsourced service providers, <em data-start=\"2183\" data-end=\"2188\">not<\/em> agents of the merchant. The Reserve Bank of India explicitly states their role is technical and operational, not fiduciary. This supports the Central Board of Direct Taxes\u2019s and the judiciary\u2019s view that <em>tax deducted at source<\/em>\u00a0on merchant discount rate\/interchange fees is not required.<\/p>\n<h3 data-start=\"2403\" data-end=\"2473\"><span class=\"ez-toc-section\" id=\"Key_Judicial_Rulings_%E2%80%93_Including_Landmark_ITAT_Ruling_2025\"><\/span><span style=\"color: #000080;\"><strong data-start=\"2406\" data-end=\"2473\">Key Judicial Rulings \u2013 Including Landmark ITAT Ruling (2025)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"2475\" data-end=\"2547\">The Income Tax Appellate Tribunal held No <em>tax deducted at source<\/em>\u00a0is deductible under Section 194H on payments made to payment gateway service providers. (One Mobikwik Systems Ltd. vs. JCIT (ITAT Delhi), Sept 2025 )<\/p>\n<p data-start=\"2548\" data-end=\"2603\">Key Findings of The Income Tax Appellate Tribunal: <span style=\"font-size: 16px;\">Payment gateways <\/span>do not act as agents<span style=\"font-size: 16px;\"> of merchants. <\/span><span style=\"font-size: 16px;\">The charges for the merchant discount rate\/payment gateway fee are <\/span>not commission<span style=\"font-size: 16px;\">. <\/span><span style=\"font-size: 16px;\">Section 194H, therefore, <\/span>does not apply<span style=\"font-size: 16px;\">. <\/span><span style=\"font-size: 16px;\">The activity is akin to providing <\/span>technical services<span style=\"font-size: 16px;\">, not commission services.\u00a0<\/span>This ruling aligns with earlier CIT(A), Tribunal, and High Court decisions on similar matters. (Cases: ITA Nos. 7830\/Del\/2018, 273 &amp; 274\/Del\/2025 )<\/p>\n<h3 data-start=\"3112\" data-end=\"3156\"><span class=\"ez-toc-section\" id=\"Industry_Practice_Supported_by_Law_Based_on_CBDT_RBI_and_ITAT_clarifications\"><\/span><span style=\"color: #000080;\"><strong data-start=\"3115\" data-end=\"3156\">Industry Practice Supported by Law :\u00a0<\/strong>Based on CBDT, RBI, and ITAT clarifications:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"TyagGW_tableContainer\">\n<div class=\"group TyagGW_tableWrapper flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 163px;\" width=\"839\" data-start=\"3204\" data-end=\"3737\">\n<thead data-start=\"3204\" data-end=\"3278\">\n<tr data-start=\"3204\" data-end=\"3278\">\n<th data-start=\"3204\" data-end=\"3240\" data-col-size=\"md\"><span style=\"color: #000080;\"><strong data-start=\"3206\" data-end=\"3225\">Type of Payment<\/strong><\/span><\/th>\n<th data-start=\"3240\" data-end=\"3264\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"3242\" data-end=\"3263\">TDS Applicability<\/strong><\/span><\/th>\n<th data-start=\"3264\" data-end=\"3278\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"3266\" data-end=\"3276\">Reason<\/strong><\/span><\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"3354\" data-end=\"3737\">\n<tr data-start=\"3354\" data-end=\"3446\">\n<td data-start=\"3354\" data-end=\"3389\" data-col-size=\"md\">Interchange fees<\/td>\n<td data-col-size=\"sm\" data-start=\"3389\" data-end=\"3413\">Not applicable<\/td>\n<td data-col-size=\"sm\" data-start=\"3413\" data-end=\"3446\">CBDT Notification No. 47\/2016<\/td>\n<\/tr>\n<tr data-start=\"3447\" data-end=\"3548\">\n<td data-start=\"3447\" data-end=\"3482\" data-col-size=\"md\">Payment gateway service charges<\/td>\n<td data-col-size=\"sm\" data-start=\"3482\" data-end=\"3506\">Not applicable<\/td>\n<td data-col-size=\"sm\" data-start=\"3506\" data-end=\"3548\">Not commission; principal-to-principal<\/td>\n<\/tr>\n<tr data-start=\"3549\" data-end=\"3645\">\n<td data-start=\"3549\" data-end=\"3584\" data-col-size=\"md\">MDR (Merchant Discount Rate)<\/td>\n<td data-col-size=\"sm\" data-start=\"3584\" data-end=\"3608\">Not applicable<\/td>\n<td data-col-size=\"sm\" data-start=\"3608\" data-end=\"3645\">Judicial rulings + RBI guidelines<\/td>\n<\/tr>\n<tr data-start=\"3646\" data-end=\"3737\">\n<td data-start=\"3646\" data-end=\"3691\" data-col-size=\"md\">Charges between banks on card transactions<\/td>\n<td data-col-size=\"sm\" data-start=\"3691\" data-end=\"3710\">Not applicable<\/td>\n<td data-col-size=\"sm\" data-start=\"3710\" data-end=\"3737\">Exempt via notification<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h3 data-start=\"3744\" data-end=\"3764\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><span style=\"color: #000080;\"><strong data-start=\"3747\" data-end=\"3764\">Conclusion<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"3766\" data-end=\"3808\"><em>tax deducted at source<\/em>\u00a0is not required to be deducted on interchange fees, payment gateway charges &amp; Merchant Discount Rate.\u00a0 Supported by the Central Board of Direct Taxes Notification No. 47\/2016, the Reserve Bank of India guidelines (2020) &amp; Multiple Tribunal and court rulings like The Income Tax Appellate Tribunal Delhi\u2019s 2025 decision in <em data-start=\"4058\" data-end=\"4085\">One Mobikwik Systems Ltd. <\/em>This provides a clear, consistent legal foundation that such charges do not fall under Section 194H and therefore attract no TDS.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Impact on ITR has to be filed by non-residents in the case earning royalty\/FTS income key implications of the Section 115A amendment and its impact on ITR filing for non-residents earning royalty\/FTS income: Amendment in Section 115A (2023): The withholding tax rate for fee for technical services (FTS) increased to 20% + surcharge + cess, &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[120],"tags":[3238],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28513"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=28513"}],"version-history":[{"count":4,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28513\/revisions"}],"predecessor-version":[{"id":28515,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28513\/revisions\/28515"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=28513"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=28513"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=28513"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}