The Finance Act 2016, introduced equalization levy of 6% to be charged from amounts paid for specified services to a non-resident not having any permanent establishment in India. This equalization levy (EL) is independent of income tax provisions and is covered under Chapter VIII of the Finance Act 2016.
|
Type of transactions |
Specified Services meaning thereby * Online advertisement * Any provision for digital advertising space * Any other facility or service for online advertisement * Any other service as may be notified by Govt |
|
Rate of Tax |
6% of the amount of consideration paid |
|
Payer |
* A person resident in India and carrying on business or profession; or * A non-resident having a permanent establishment in India |
|
Payee |
A non-resident not having a PE in India |
|
Threshold exemption |
If the aggregate amount of consideration received or receivable in a previous year by the non-resident from the payer as stated above does not exceed Rs. 1,00,000/- |
|
Due date of deposit |
Seventh day of the month immediately following the said calendar month |
|
Interest on late payment |
Simple interest at the rate of one per cent for every month or part of a month |
However, the payment for online advertisement or space (Facebook, google ads, LinkedIn, etc.) to Residents is an advertisement – hence TDS u/s 194C @2% would be applicable.
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