What is TDS on SaaS Payments?
Nexa Consultancy | Startup & Finance Glossary
Payments made by an Indian company to a foreign SaaS provider (like AWS, Google Workspace, or HubSpot) can be considered a payment for royalty or technical services.
Startup Example: An Indian startup pays $1,000 to a US-based SaaS company. The startup may be required to deduct TDS under Section 195 of the Income Tax Act. The rate depends on the Double Taxation Avoidance Agreement (DTAA) with the US. Failure to do so can result in disallowance of the expense.
Our TDS on foreign payments solution helps startups stay compliant.