• Service: Tax, International Tax
  • Type: Regulatory update
  • Date: 7/30/2013

India - No withholding on mutual fund commissions, brokerage fees 

July 30:  The KPMG member firm in India prepared a report on the following development (read the July 2013 report by clicking on the hyperlink provided below):
  • Commissions / brokerage fees paid by asset management company to mutual fund distributors not subject to withholding - The Chennai Bench of the Income-tax Appellate Tribunal held that tax is not required to be withheld on payments by an asset management company to distributors of mutual fund units. The tribunal recognized that services provided by mutual fund distributors are specifically excluded from withholding under section 194H of the Income-tax Act, 1961, because this statutory provision excludes from withholding tax (i.e., “tax deducted at source”) requirements on commissions or brokerage fees paid on securities. Also, the tribunal found that these services are not “professional services” or “technical services” pursuant to section 194J.

    The case is: Sundaram Asset Management Co. Ltd. Read a July 2013 report [PDF 439 KB]

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