Indian company paying a foreign consultant — do I need an adviser, or can I do it alone?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: characterising the payment (technical services, royalty, business profits) decides the rate, and the treaty rate requires the consultant's residency certificate and declaration.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Do we have to withhold tax when we pay a consultant based outside India?
The payer carries the duty to determine whether the payment is chargeable in India, and that duty does not depend on the consultant having any presence here. It is a decision you have to take and be able to defend, not a question you can leave to the recipient. If you decide wrongly the exposure falls on the company twice over: the tax itself, recoverable from you as payer, and the loss of the deduction for the expense. That is why the analysis is worth doing before the first invoice rather than after a year of payments has accumulated.
Our consultant is asking about a residency certificate — what is it for?
Treaty rates are not available on request. To apply the rate in the treaty rather than the domestic rate, you need the consultant's certificate of residence from their own tax authority together with the declaration that goes with it, held on your file at the time the payment is made. A certificate obtained afterwards is much weaker support than one held before. Build the request into the engagement paperwork, and note that these certificates are issued for a period and expire, so a long-running arrangement needs a renewal cycle rather than a single document at the start.
Can we still claim the expense if we did not deduct tax on the payment?
Not safely. Where a payment was chargeable in India and nothing was deducted, the deduction for that expense is exposed to disallowance in addition to the company's own liability for the tax. In other words, a wrong determination costs more than the tax that should have been withheld. Where this is discovered during the year there are usually steps that improve the position, and they are all better taken before the return is filed than after an assessment raises the point. The first task is to work out, invoice by invoice, which payments were actually chargeable.
Is a software or design fee a royalty or a business profit?
That characterisation decides the rate, and it is the question most often skipped. The same commercial arrangement can be technical services, royalty or business profits depending on what is actually delivered, what rights pass and what the contract says about them. A licence to use something and a service performed for you are different transactions even when the invoice describes both loosely as consultancy. The analysis reads the contract, the deliverable and the treaty article together. Where the wording is genuinely ambiguous, the sensible route is to fix it in the contract before the next engagement rather than argue it later.
The consultant has no office or staff in India — is the payment still chargeable?
Possibly. Absence of a presence in India disposes of some questions but not all of them, because whether a payment is chargeable depends on how it is characterised, and some characterisations do not require the recipient to be present here at all. That is precisely why the payer's duty is framed as a determination rather than as a physical test. Take the analysis in order: what is being paid for, how that is characterised, what the treaty article says about it, and only then what the rate is and what documentation has to be in hand.
What does the bank need before it will remit a consultancy fee abroad?
The remittance needs the payer's declaration about the nature of the payment and the tax position taken on it, and in most cases an accountant's certificate supporting that position. The bank is not assessing the tax; it is checking that the declaration exists and is consistent. The practical consequence is that the characterisation work has to be finished before the payment run, not after, because the certificate rests on it. Companies that leave this to the day of remittance end up either delaying the payment or certifying a position that nobody has examined.
What is a DTAA?
Double Taxation Avoidance Agreement — India's name for a tax treaty. It does the same work as any treaty: allocates taxing rights between India and the other country, caps Indian withholding on payments abroad, and sets out whether relief comes by exemption or by credit. To use one you generally need a tax residency certificate from the other country, Form 10F, and a PAN in the deductor's records. See DTAA relief between India and Canada.
What are Forms 15CA and 15CB for?
They clear a payment out of India. Form 15CA is the remitter's declaration of the payment and the tax withheld on it; Form 15CB is an accountant's certificate on the taxability of the amount, the treaty article relied on and the correct withholding rate. The bank generally will not execute the transfer without them, in the categories where they are required. The work is deciding the rate correctly, because the certificate is the record of that decision. See 15CA and 15CB certification.
