To understand whether TDS shall be deducted on marketing development fees paid outside India, we need to understand whether such payment is liable to tax in India.

🔘 For any payments made to non-resident in foreign currency, the amount of tax, if deductible, will be deducted under Section 195 of the Income Tax Act, 1961.

🔘The first condition to deduct tax under Section 195 of the Act is that the payment must be chargeable under the Act, and thereafter, the question of deduction of tax will arise.

🔘The amounts payable to the non-resident firm for the services to be rendered in relation to marketing development outside India will not attract the provisions of tax deducted at source under the Income Tax Act, 1961 because the services under question are neither technical nor managerial in nature.

🔘They do not qualify the definition of ‘Fees for Technical Services.