Applicability of section 195, Income Tax

[VENU GOPAL]

We are importing the raw meterials for our manufaturing from the various countries thru the letter of credit form the bankers. At the time due date of LC we will pay the ncessary amount to the foreign customers thru the LC. In our case Section 195 is applicable or not.

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[Ravi Chopra]

Mere an activity of sale and purchase of goods does not give rise to any income which is taxable in India and therefore, the provisions of Section 195 are not applicable.