{"id":7313,"date":"2025-07-02T11:20:29","date_gmt":"2025-07-02T11:20:29","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/?post_type=glossary&p=7313"},"modified":"2025-07-02T11:20:30","modified_gmt":"2025-07-02T11:20:30","slug":"section-195-tds-on-non-residents","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/section-195-tds-on-non-residents\/","title":{"rendered":"Section 195 – TDS on Non-Residents"},"content":{"rendered":"

Section 195 of the Indian Income Tax Act<\/a>, 1961, mandates Tax<\/a> Deducted at Source (TDS<\/a>) on payments made to non-residents, ensuring that taxes are collected on income accruing or arising in India to non-resident individuals or entities.<\/p>\n\n\n\n

What is Section 195?<\/h2>\n\n\n\n

Section 195 requires any person (resident or non-resident) making a payment to a non-resident (excluding salary) to deduct TDS if the income is chargeable under the Income Tax<\/a> Act. This includes payments such as interest, royalties, fees for technical services, dividend<\/a>s, and capital gain<\/a>s. <\/p>\n\n\n\n

Who is Liable to Deduct TDS?<\/h2>\n\n\n\n

Any person responsible for paying a sum to a non-resident, which is taxable in India, must deduct TDS. This includes individuals, Hindu Undivided Families (HUFs), firms, companies, and other entities. <\/p>\n\n\n\n

TDS Rates Under Section 195<\/h2>\n\n\n\n

The TDS rates vary based on the nature of the income:<\/p>\n\n\n\n