If you are publishing your business online through google, yahoo or any other media you may have a doubt that is it necessary to give tax for such online advertising? Online advertising, can be also defined as, internet marketing, online marketing or e-marketing, which is considered as the marketing and promotion of products or services over the Internet. Consider you are advertising through television or newspaper you are forced to give tax for it.
As per the latest report from Times of India , Calcutta Income-Tax Appellate Tribunal (ITAT) says that the payment to websites such as Google, Yahoo, chitika , Infolinks for advertising your product online are not liable to tax in India.
Income-Tax Appellate Tribunal, in its order on 12/4/2013, noticed that most of the web servers located in the tax jurisdiction can be construed as PE but the problem is that the servers are outside India and therefore the tax claim based on having a PE in India could not be made.
ITAT also noticed that the presence of a search engine in a location, other than the place of its real place of management, is only on the internet or by way of a website, which is only an virtual appearance.