Section 195 of the Income Tax Act

Income-tax Act, 2025: s.393

Section 195 of the Income-tax Act, 1961 corresponds to section 393 (Tax to be deducted at source) of the Income-tax Act, 2025.

Read section 393 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 195 is Engineering Analysis Centre of Excellence (P) Ltd. v. CIT (432 ITR 471), cited in 914 of the 2,836 judgments on BharatTax that turn on this section.

Leading authorities on Section 195

Engineering Analysis Centre of Excellence (P) Ltd. v. CIT
432 ITR 471 · 2021 · Supreme Court
914
citing judgments

Payments for the supply or use of computer software, where there is no transfer of copyright but only a right to use the copyrighted product, are generally considered business profits and not 'royalty' or 'fees for technical services' under the Income Tax Act, 1961 or relevant DTAAs. This principle also applies to transponder fees, which are not taxable as royalty.

Bharat Earth Movers v. CIT
245 ITR 428 · 2000 · Supreme Court
901
citing judgments

A business liability that has definitely arisen in an accounting year is deductible even if it needs to be quantified and discharged later, as long as its incurring is certain and can be reasonably estimated.

GE India Technology Centre Pvt. Ltd. v. CIT
327 ITR 456 · 2010 · Supreme Court
663
citing judgments

Tax must be deducted at source from payments made to a non-resident under Section 195 only if such payment is chargeable to tax in India. The Assessing Officer bears the onus to establish that the payments made are indeed chargeable to tax under the Income Tax Act.

Apollo Tyres Ltd. v. CIT
255 ITR 273 · 2002 · Supreme Court
657
citing judgments

For the purpose of computing book profits under Section 115J, arrears of depreciation, including those arising from assets working extra shifts, are a necessary charge on profits if debited to the profit and loss account and are allowable as such.

CIT v. Samsung Electronics Ltd.
345 ITR 494 · 2012 · High Court
461
citing judgments

Payments by Indian residents to non-resident foreign software suppliers for software are considered royalty, constituting income deemed to accrue in India under section 9(1)(v), thereby requiring tax deduction at source under section 195.

Allied Motors (P) Ltd. v. CIT
224 ITR 677 · 1997 · Supreme Court
398
citing judgments

Amendments to the Income-tax Act that are curative, clarificatory, or beneficial in nature apply retrospectively from the date the original statutory provision was introduced, even if not explicitly stated.

Ishikawajima Harima Heavy Industries Ltd. v. DIT
288 ITR 408 · 2007 · Supreme Court
394
citing judgments

Income from offshore supply of goods and services is not taxable in India if the entire transaction, including transfer of ownership and payments, occurs outside India.

CIT v. De Beers India Minerals (P.) Ltd.
346 ITR 467 · 2012 · High Court
371
citing judgments

For fees for technical or consultancy services to 'make available' technical knowledge or know-how under a DTAA, the service must transmit such knowledge, allowing the recipient to derive an enduring benefit and utilize it independently in the future.

Asia Satellite Telecommunications Co. Ltd. v. DIT
332 ITR 340 · 2011 · High Court
359
citing judgments

Payments for the use of equipment, such as satellite transponders, do not constitute 'royalty' under Section 9(1)(vi) of the Income-tax Act, 1961, or under applicable tax treaties, especially when there is no transfer of the right to use a process or underlying technology.

DIT v. New Skies Satellite BV
382 ITR 114 · 2016 · High Court
325
citing judgments

An amendment to the Income Tax Act, such as the Finance Act, 2012 amendment to Section 9(1)(vi) defining royalty, does not automatically override or alter the definition of 'royalty' as provided in a Double Taxation Avoidance Agreement (DTAA) unless the DTAA itself is bilaterally amended. The definition of royalty in a DTAA remains unaffected by unilateral changes to domestic law.

Judgments on Section 195

Deputy Commissioner of Income Tax, Visakhapatnam vs. Ravikumar Burugupalli, West Godavari

In the result, appeal of the revenue is dismissed

ITA 198/VIZ/2025[2016-17]Status: DisposedITAT Visakhapatnam22 Aug 2025AY 2016-17

Bench: Shri Ravish Sood, Hon’Ble & Shri S Balakrishnan, Hon’Bleआईटीए. नं. / Ita No. 198/Viz/2025 निर्धारणवर्ा/ Assessment Year:2016-17) Dy. Cit (International Taxation) V. Ravikumar Burugupalli Income Tax Office Proprietor Sasi Fuel Infinity Towers, Ground Floor Sasi School, Main Road Sankaramatam Road Velivenu Post Visakhapatnam - 530016 West Godavari District – 534329 [Pan:Ajzpb2139H] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) सी.ओ सं. / C.O. No. 38/Viz/2025 [आयकरअपीलसं.से उत्पन्न/I.T.A.No.198/Viz/2025 (निर्धारण वर्ा/ Assessment Years: 2016-17)] Ravikumar Burugupalli V. Dy. Cit (International Taxation) Proprietor Sasi Fuel Income Tax Office Sasi School, Main Road Infinity Towers, Ground Floor Velivenu Post Sankaramatam Road Visakhapatnam - 530016 West Godavari District – 534329 [Pan:Ajzpb2139H] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented By : Smt A. Aruna, Advocate राजस्व का प्रतततितित्व/ Department Represented By : Dr. Aparna Villuri, Sr.Ar

Section 201Section 201(1)Section 251(1)(c)

The Dy. Commr. of Income Tax, Cir.-3(1), Rajkot-Gujarat vs. M/S. Sonpal Exports Pvt. Ltd., Rajkot-Gujarat

In the result, appeal filed by the revenue is dismissed

ITA 29/RJT/2018[2012-13]Status: DisposedITAT Rajkot21 Aug 2025AY 2012-13

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकरअपीलसं./Ita No. 29/Rjt/2018 "नधा"रणवष" / Assessment Year: (2012-13) (Hybrid Hearing) The Dcit, Circle – 3(1), Vs. M/S. Sonpal Exports Pvt. Ltd. Rajkot Aayakar Bhavan, Room Dhari Bagsara Road, Nr. Ice No. 114, 1St Floor, Race Course Factory, Amreli Ring Road, Rajkot Pan No.: Aajcs0177N (Assessee) (Respondent) Assessee By : Shri Kalpesh Doshi, Ld. Ar Respondent By : Shri Praveen Verma, Ld. Cit(Dr) Date Of Hearing : 24/06/2025 Date Of Pronouncement : 21/08/2025 आदेश / O R D E R Per, Dr. Arjun Lal Saini, Am; By Way Of This Appeal, The Revenue, Has Challenged Correctness Of The Order Dated 16.11.2017, Passed By The Learned Cit(A), In The Matter Of Assessment Under Section 143(3) Of The Income Tax Act 1961, For The Assessment Year 2012-13. Grievances Raised By The Revenue, Which Are Interconnected & Will Be Taken Up Together, Are As Follows: “1. On The Facts & Circumstances Of The Case & In Law, The Ld. Cit(A) Has Erred In Deleting The Addition Of Rs. 13,96,33,023/- Holding That Provision Of Section 195 Will Not Be Applicable. 2. On The Facts Of The Case & In Law, The Ld. C.I.T. (A) Erred In Ignoring The Facts That The Assessee Has Failed To Prove The Genuineness Of Foreign Commission Expenses Before The A.O. 3. It Is, Therefore, Prayed That The Order Of The C.I.T. (A) May Be Set Aside & That Of The A.O. Be Restored To The Above Extent. Dcit Vs. M/S. Sonpal Export Pvt. Ltd.

For Appellant: Shri Kalpesh Doshi, Ld. ARFor Respondent: Shri Praveen Verma, Ld. CIT(DR)
Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 195

Venugoopal Subramanyam Raja, Kumbakonam vs. DCIT Cirle 2(1), Trichy

In the result, all the appeals filed by the assessee are dismissed

ITA 2857/CHNY/2024[2010-11]Status: DisposedITAT Chennai21 Aug 2025AY 2010-11

Bench: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunathaआयकर अपील सं./I.T.A. Nos.2855, 2856 & 2857/Chny/2024 िनधा"रण वष"/Assessment Years: 2007-08, 2009-10 & 2010-11 Venugoopal Subramaniyam Raja, Vs. The Deputy Commissioner Of 40/41, Town High School Road, Income Tax, Kumbakonam 612 001, Tamil Nadu. Circle 2(1), Trichy. [Pan:Aafpr5570F] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri R. Sivaraman, Advocate ""थ" की ओर से/Respondent By : Shri C. Sivakumar, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 20.08.2025 घोषणा की तारीख /Date Of Pronouncement : 21.08.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: These Three Appeals Filed By The Assessee Are Directed Against Separate Orders All Dated 09.09.2024 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi For The Assessment Years 2007-08, 2009-10 & 2010-11. 2. Since Issues Raised In These Appeals Are Similar Based On The Same Identical Facts, With The Consent Of The Both The Parties, We Proceed To Hear The Appeals Together & Pass Consolidated Order For The Sake Of Convenience.

For Appellant: Shri R. Sivaraman, AdvocateFor Respondent: Shri C. Sivakumar, Addl. CIT
Section 195Section 40Section 9Section 9(1)(v)

Venugoopal Subramanyam Raja, Kumbakonam vs. DCIT Cirle 2(1), Trichy

In the result, all the appeals filed by the assessee are dismissed

ITA 2856/CHNY/2024[2009-10]Status: DisposedITAT Chennai21 Aug 2025AY 2009-10

Bench: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunathaआयकर अपील सं./I.T.A. Nos.2855, 2856 & 2857/Chny/2024 िनधा"रण वष"/Assessment Years: 2007-08, 2009-10 & 2010-11 Venugoopal Subramaniyam Raja, Vs. The Deputy Commissioner Of 40/41, Town High School Road, Income Tax, Kumbakonam 612 001, Tamil Nadu. Circle 2(1), Trichy. [Pan:Aafpr5570F] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri R. Sivaraman, Advocate ""थ" की ओर से/Respondent By : Shri C. Sivakumar, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 20.08.2025 घोषणा की तारीख /Date Of Pronouncement : 21.08.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: These Three Appeals Filed By The Assessee Are Directed Against Separate Orders All Dated 09.09.2024 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi For The Assessment Years 2007-08, 2009-10 & 2010-11. 2. Since Issues Raised In These Appeals Are Similar Based On The Same Identical Facts, With The Consent Of The Both The Parties, We Proceed To Hear The Appeals Together & Pass Consolidated Order For The Sake Of Convenience.

For Appellant: Shri R. Sivaraman, AdvocateFor Respondent: Shri C. Sivakumar, Addl. CIT
Section 195Section 40Section 9Section 9(1)(v)

Venugoopal Subramanyam Raja, Kumbakonam vs. DCIT Cirle 2(1), Trichy

In the result, all the appeals filed by the assessee are dismissed

ITA 2855/CHNY/2024[2007-08]Status: DisposedITAT Chennai21 Aug 2025AY 2007-08

Bench: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunathaआयकर अपील सं./I.T.A. Nos.2855, 2856 & 2857/Chny/2024 िनधा"रण वष"/Assessment Years: 2007-08, 2009-10 & 2010-11 Venugoopal Subramaniyam Raja, Vs. The Deputy Commissioner Of 40/41, Town High School Road, Income Tax, Kumbakonam 612 001, Tamil Nadu. Circle 2(1), Trichy. [Pan:Aafpr5570F] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri R. Sivaraman, Advocate ""थ" की ओर से/Respondent By : Shri C. Sivakumar, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 20.08.2025 घोषणा की तारीख /Date Of Pronouncement : 21.08.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: These Three Appeals Filed By The Assessee Are Directed Against Separate Orders All Dated 09.09.2024 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi For The Assessment Years 2007-08, 2009-10 & 2010-11. 2. Since Issues Raised In These Appeals Are Similar Based On The Same Identical Facts, With The Consent Of The Both The Parties, We Proceed To Hear The Appeals Together & Pass Consolidated Order For The Sake Of Convenience.

For Appellant: Shri R. Sivaraman, AdvocateFor Respondent: Shri C. Sivakumar, Addl. CIT
Section 195Section 40Section 9Section 9(1)(v)