Indian Companies Do Not Need To Deduct Tax At Source While Advertising Online

We happened to come across some good news for Indian companies and startups which advertise their services and products on online advertising platforms like Google and Yahoo. According to a ruling by an Income Tax Appellate Tribunal in Kolkata last month, Indian companies can be relieved with respect to the dilemma of not being able to claim tax on business expenses incurred while advertising on these platforms. 


Earlier, all the Indian companies had to either  pay the amount corresponding to tax deducted at source (since Google and Yahoo do not allow tax being deducted from payment) or lose the opportunity to claim advertising expenditure  as tax deductible revenue expense.

This new ruling by the tribunal now clearly states that if you are paying for advertising on Google and Yahoo which do not have permanent establishment in India, you do not have to be subjected to TDS. This can also be interpreted for other payments that have to be made to companies abroad.

Here is a copy of the 31 page ruling made by the Kolkata tribunal.

Right florist vs income tax on google, yahoo advertising from Jayadevan Pk

Source | Moneycontrol

Via | NextBigWhat

Image Source | Shutterstock

Disclaimer: This post does not equal legal advice. Consult with your CA/Lawyer before you apply this ruling to your tax planning.

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