Salary Payable Outside
India/Payable to Non-Resident Applicability of Section 40(a)(iii) conditions
The amount is paid/payable:
to any person outside
to a non-resident in India.
paid is in the nature
of salary. Such
salary amount is chargeable to income tax
in the hands
of the recipient under
the Income Tax Act, 1961
and TDS is required to be deducted under the Income
Tax Act, 1961.
When Disallowance is Applicable
The entire amount of salary would
be disallowed if tax has not been
deducted at source
and tax has not been deposited with the government.
Reversal of Disallowance
If salary amount has been disallowed once, such amount
would be treated
as disallowed forever
even if tax deducted
at source is subsequently deposited with the government by the payer.
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