Tax exemption
KETAN MANDANI
(Querist) 11 May 2015
This query is : Resolved
If I am providing consultancy services to The World Bank (International Bank of Reconstruction and Development (IBRD)) and receive professional fees, (for services to be rendered in India and Income Accruing in India)
1) are such fees exempt from Income tax in the hands of service provider?
2) are such fees exempt from Service Tax in the hands of Service Provider?
Please give your valuable opinion..
thanks & Rgds
Ketan Mandani
R.K Nanda
(Expert) 11 May 2015
consult tax lawyer.
KETAN MANDANI
(Querist) 11 May 2015
there are different opinion amongst tax lawyers..
Guest
(Expert) 11 May 2015
Your question is purely of an academic nature in the absence of appropriate background.
The following questions arise out of your query:
1) Since when you are providing consultancy to the foreign client, the World Bank (International Bank of Reconstruction and Development (IBRD)?
2) Have you received any payment so far from the client and whether the IBRD has deductd any amount as tax from that payment or not?
3) What are the conditions of your contract/ agreement with the IBRD?
4) Have you not discussed with the IBRD about the issue of taxation of your fee? If not any reason for that? If yes, what wa their response?
5) Do you want to know with reference to the Indian Tax laws or the tax laws of the HQ country of the IBRD?
6) Being a Director, Magnate Advisory Services Pvt. Ltd., have you consulted with your own Chartered Accountant of Taxation advisor? If yes, what was his response and if not, any reason for not having consulted him?
7) Being a consultant of the top class world organisation, any specific reason for seeking free advice for your commercial query, when your consultancy may fetch you hefy fee from the World Bank organisation?
Guest
(Expert) 11 May 2015
What are those different opinions of tax lawyers?
KETAN MANDANI
(Querist) 12 May 2015
This question is before contract (ie. at the time of quoting the fees. 'Whether there is tax exemption or not' need to be considered while quoting the fees). As the co-ordinating officer of WB claimed that all WB salaries are free of tax, i assume that it is the salaries they receive from WB is tax free and the same wouldn't have been the case with professional fees.
My tax consultant replied that he could not find any such rule in IT Act exempting me from tax and hence it should be taxable.
Before I proceed further with WB guys and ask them to give me a tax exemption certificate, I thought it preferable to take Expert's opinion on this site.
Guest
(Expert) 12 May 2015
There is a difference between the salaries of employees of the organisation and the payment to contractors for their services.
