30 May 2010
Yes, the TDS would be applicable on the provision made for audit fee @ 10% and would be deducted under section 194J as it would fall under profession. As per section 194J of the Income tax act, any person responsible to make payment towards fee for technical services and professional services shall at the time of CREDIT or PAYMENT whichever is earlier, deduct @ 10%.
So it is clear from the above language, that the TDS would be deducted once credited in the books of accounts. And further the TDS would be deducted on the whole amount inclusive of service Tax.
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