{"url":"https://lrlabs.ai/t/s195_gross_up_net_contracts","engine":"deterministic","llm_in_path":false,"id":"s195_gross_up_net_contracts","question":"What happens to withholding when the Indian payer bears the tax under a net-of-tax contract?","answer":"s.393(10), Income-tax Act 2025 (old s.195A): the income is grossed up — increased to the amount which, after deduction, equals the net amount payable. At the s.207(2) 20% rate a net-100 royalty becomes 125 gross; at the India–US 15% treaty rate it becomes 117.65 (100/0.85), gate permitting.","pinpoint":"s.393(10), Income-tax Act 2025","confidence":"settled","as_at":"14 Aug 2026","quote":"the income shall be increased to an amount which after deduction of tax as per provisions of this Chapter becomes equal to the net amount payable","quote_string_verified":true,"quote_source":"provision:IN.ITA2025.S393-2"}