TDS on Foreign Payments for Startups

The Global Startup's Tax Trap: TDS on Foreign Payments

Your startup relies on global tools and talent. You're paying for SaaS subscriptions like AWS or Google Workspace, running ads on Facebook, and hiring foreign consultants. But are you complying with <a href="/startup-finance-glossary/what-is-tds-tax-deducted-at-source">TDS (Withholding Tax)</a> on these payments?

Failure to deduct tax under Section 195 can lead to the entire expense being disallowed, plus hefty interest and penalties from the Income Tax department. It's a hidden compliance trap that can have a massive impact on your bottom line.

Critical Compliance for Foreign Remittances

• Determining the correct nature of the payment (royalty, technical fee, etc.).
• Applying the correct TDS rate as per the Income Tax Act and <a href="/startup-finance-glossary/what-is-dtaa-double-taxation-avoidance-agreement">Double Taxation Avoidance Agreement (DTAA)</a>.
• Filing <a href="/startup-finance-glossary/what-is-form-15ca-15cb">Form 15CA</a> (a declaration) and obtaining <a href="/startup-finance-glossary/what-is-form-15ca-15cb">Form 15CB</a> from a Chartered Accountant.
• Timely deposit of the deducted tax and filing of TDS returns.
• Issuing Form 16A to the foreign entity.

Our Solution: Compliant and Hassle-Free Global Transactions

Nexa Consultancy provides end-to-end support for TDS on foreign payments. We assess each payment, determine the correct tax liability by considering DTAA benefits, and manage the entire compliance process, including Form 15CA/CB certification.

We ensure you can use the best global services to grow your business without fearing tax notices or penalties, making your international operations smooth and compliant.