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

M/S. Autodesk Asia Pte Limited, Singapore vs. Assistant Commissioner of Income Tax (International Taxation), Circle - 1(1), Bangalore

In the result, the appeal of the assessee is allowed

ITA 1274/BANG/2019[2016-17]Status: DisposedITAT Bangalore09 Aug 2021AY 2016-17

Bench: Shri N.V. Vasudevan & Shri B R Baskaranit(It)A No.1274/Bang/2019 Assessment Year: 2016-17 M/S. Autodesk Asia Pte. Ltd., Vs. The Assistant Commissioner Of 3, Fusionopolis Way 10/21 Symbiosis, Income Tax (International Taxation), Singapore, Foreign, Singapore. Circle – 1(1), Pan: Aafca 6398 D Bengaluru. Appellant Respondent Assessee By : Shri. T. Suryanarayana, Advocate Revenue By : Ms. Neera Malhotra, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 05.08.2021 Date Of Pronouncement : 09.08.2021 O R D E R Per N.V. Vasudevan: This Is An Appeal By The Assessee Against The Order Dated 24.04.2019 Passed By The Acit (International Taxation), Circle -1(1), Bengaluru, Under Section 143(3) Read With Section 144C Of The Income Tax Act, 1961 (Act), In Relation To Ay 2016-17. 2. The Assessee Is A Company Incorporated In Singapore & Is A Tax Resident Of Singapore In Terms Of The India Singapore Double Taxation Avoidance Agreement (Dtaa). The Assessee Is Engaged In The Business Of Distribution Of Computer Software & Providing Ancillary Services In The Asia Pacific Region. During The Relevant Previous Year, The Assessee Sold

For Appellant: Shri. T. Suryanarayana, AdvocateFor Respondent: Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144CSection 195Section 9(1)(vi)

Ibm India Private Limited, Bangalore vs. DCIT, Bangalore

In the result, the appeals filed by the assessee are allowed

ITA 372/BANG/2016[2014-15]Status: DisposedITAT Bangalore05 Aug 2021AY 2014-15

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm It(It)A No.371/Bang/2016 : Asst.Year 2014-2015 It(It)A No.372/Bang/2016 : Asst.Year 2014-2015 M/S.Ibm India Private Limited The Dy.Commissioner Of No.12, Subramanya Arcade Income-Tax, International V. Bannerghatta Main Road Taxation, Circle (1) Bangalore. Bangalore – 560 029. Pan : Aaaci4403L. (Appellant) (Respondent) O R D E R Per George George K, Jm This Application U/S 158A(5) Of The Income-Tax Act Seeks To Amend The Order Of The Itat Passed In It(It)A No.371/Bang/2016 & It(It)A No.372/Bang/2016. The Above Appeals Were Disposed Of By The Itat Vide Its Order Dated 16.06.2017. 2. During The Course Of Hearing Of The Above Appeals On 13.06.2017, The Learned Ar Submitted That The Grounds Taken In The Appeals Were Covered Against The Assessee By The Judgment Of The Hon’Ble Karnataka High Court In Assessee’S Own Case In Ita No.280 Of 2005. It Was Further Submitted By The Learned Ar That Against The Said Judgment Of The Hon’Ble Karnataka High Court, The Assessee Has Filed Slp Before The Hon’Ble Apex Court Vide Slp No.396 Of 2012 / Civil Appeal No.4419 Of 2012, Which Was Pending Adjudication. The Assessee Had Accordingly Filed A Declaration In Form No.8 U/S 158A(1) Of The I.T.Act (For Avoiding Repetitive Appeals) Read With Rule 16 Of The Income Tax Rules, 1962, For The Year Under Consideration, Submitting That Identical Question Of Law

Section 158A(1)Section 158A(5)Section 195Section 9(1)(vi)

Ibm India Private Limited, Bangalore vs. DCIT, Bangalore

In the result, the appeals filed by the assessee are allowed

ITA 371/BANG/2016[2014-15]Status: DisposedITAT Bangalore05 Aug 2021AY 2014-15

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm It(It)A No.371/Bang/2016 : Asst.Year 2014-2015 It(It)A No.372/Bang/2016 : Asst.Year 2014-2015 M/S.Ibm India Private Limited The Dy.Commissioner Of No.12, Subramanya Arcade Income-Tax, International V. Bannerghatta Main Road Taxation, Circle (1) Bangalore. Bangalore – 560 029. Pan : Aaaci4403L. (Appellant) (Respondent) O R D E R Per George George K, Jm This Application U/S 158A(5) Of The Income-Tax Act Seeks To Amend The Order Of The Itat Passed In It(It)A No.371/Bang/2016 & It(It)A No.372/Bang/2016. The Above Appeals Were Disposed Of By The Itat Vide Its Order Dated 16.06.2017. 2. During The Course Of Hearing Of The Above Appeals On 13.06.2017, The Learned Ar Submitted That The Grounds Taken In The Appeals Were Covered Against The Assessee By The Judgment Of The Hon’Ble Karnataka High Court In Assessee’S Own Case In Ita No.280 Of 2005. It Was Further Submitted By The Learned Ar That Against The Said Judgment Of The Hon’Ble Karnataka High Court, The Assessee Has Filed Slp Before The Hon’Ble Apex Court Vide Slp No.396 Of 2012 / Civil Appeal No.4419 Of 2012, Which Was Pending Adjudication. The Assessee Had Accordingly Filed A Declaration In Form No.8 U/S 158A(1) Of The I.T.Act (For Avoiding Repetitive Appeals) Read With Rule 16 Of The Income Tax Rules, 1962, For The Year Under Consideration, Submitting That Identical Question Of Law

Section 158A(1)Section 158A(5)Section 195Section 9(1)(vi)

Ibm India Private Limited, Bangalore vs. DCIT, Bangalore

In the result, the appeals filed by the assessee are allowed

ITA 370/BANG/2016[2013-14]Status: DisposedITAT Bangalore05 Aug 2021AY 2013-14

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm It(It)A No.369/Bang/2016 : Asst.Year 2013-2014 It(It)A No.370/Bang/2016 : Asst.Year 2013-2014 M/S.Ibm India Private Limited The Dy.Commissioner Of No.12, Subramanya Arcade Income-Tax, International V. Bannerghatta Main Road Taxation, Circle (1) Bangalore. Bangalore – 560 029. Pan : Aaaci4403L. (Appellant) (Respondent) O R D E R Per George George K, Jm This Application U/S 158A(5) Of The Income-Tax Act Seeks To Amend The Order Of The Itat Passed In It(It)A No.369/Bang/2016 & It(It)A No.370/Bang/2016. The Above Appeals Were Disposed Of By The Itat Vide Its Order Dated 16.06.2017. 2. During The Course Of Hearing Of The Above Appeals On 13.06.2017, The Learned Ar Submitted That The Grounds Taken In The Appeals Were Covered Against The Assessee By The Judgment Of The Hon’Ble Karnataka High Court In Assessee’S Own Case In Ita No.280 Of 2005. It Was Further Submitted By The Learned Ar That Against The Said Judgment Of The Hon’Ble Karnataka High Court, The Assessee Has Filed Slp Before The Hon’Ble Apex Court Vide Slp No.396 Of 2012 / Civil Appeal No.4419 Of 2012, Which Was Pending Adjudication. The Assessee Had Accordingly Filed A Declaration In Form No.8 U/S 158A(1) Of The I.T.Act (For Avoiding Repetitive Appeals) Read With Rule 16 Of The Income Tax Rules, 1962, For The Year Under Consideration, Submitting That Identical Question Of Law

Section 158A(1)Section 158A(5)Section 195Section 9(1)(vi)

M/S the Raddi Sahakara Bank Niyamitha, Dharwad vs. Income Tax Officer, Hubli

In the result, the appeals filed by the assessee are allowed

ITA 369/BANG/2016[2011-12]Status: DisposedITAT Bangalore05 Aug 2021AY 2011-12

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm It(It)A No.369/Bang/2016 : Asst.Year 2013-2014 It(It)A No.370/Bang/2016 : Asst.Year 2013-2014 M/S.Ibm India Private Limited The Dy.Commissioner Of No.12, Subramanya Arcade Income-Tax, International V. Bannerghatta Main Road Taxation, Circle (1) Bangalore. Bangalore – 560 029. Pan : Aaaci4403L. (Appellant) (Respondent) O R D E R Per George George K, Jm This Application U/S 158A(5) Of The Income-Tax Act Seeks To Amend The Order Of The Itat Passed In It(It)A No.369/Bang/2016 & It(It)A No.370/Bang/2016. The Above Appeals Were Disposed Of By The Itat Vide Its Order Dated 16.06.2017. 2. During The Course Of Hearing Of The Above Appeals On 13.06.2017, The Learned Ar Submitted That The Grounds Taken In The Appeals Were Covered Against The Assessee By The Judgment Of The Hon’Ble Karnataka High Court In Assessee’S Own Case In Ita No.280 Of 2005. It Was Further Submitted By The Learned Ar That Against The Said Judgment Of The Hon’Ble Karnataka High Court, The Assessee Has Filed Slp Before The Hon’Ble Apex Court Vide Slp No.396 Of 2012 / Civil Appeal No.4419 Of 2012, Which Was Pending Adjudication. The Assessee Had Accordingly Filed A Declaration In Form No.8 U/S 158A(1) Of The I.T.Act (For Avoiding Repetitive Appeals) Read With Rule 16 Of The Income Tax Rules, 1962, For The Year Under Consideration, Submitting That Identical Question Of Law

Section 158A(1)Section 158A(5)Section 195Section 9(1)(vi)