A foreign consultant needs to be hired for a professional assignment for a FC based project in India. Kindly clarify on the following:-
- Whether his remuneration and out of pocket expenses can be paid out of the FC funds
- What approvals are required, if any, relating to his appointment and payment of remuneration and other expenses?
Warm Regards
CA Sharad Kabra
Dear Sharad,
You have not stated if the organisation is a non-profit, however I am assuming it to be so, since you talk of Foreign Contribution funds. Issues involved are:
1. S. 11(c) whether project is being implemented in India for your organisation’s objectives. If yes, then there is no issue under Income Tax.
2. A foreign consultant if required to undertake assignment in context of (1) above, NPO can sign a contract and make necessary payment as per contractual terms.
3. While making payment you will need to ensure TDS provisions, particularly relating to S.195 (presuming the foreign consultant is a non-resident for Income Tax purposes).
4. In case payment is being transferred out of India, you will need to fulfil requirements of Form 15CA & 15CB.
rgds
The FC has to open a Project Office (PO) in India as per RBI’s Master Directions. The PO shall open a bank account in India. Then the FC can remit funds to the Project Office’s bank account in India and pay the Foreigner who is working on the Project in India and also undertake other project related expenses.
As far as Visa is concerned, the Foreigner shall have to obtain an Employment/Work Visa from the Govt.of India.