16 February 2009
I want to know whether alegal firm is required to deduct tax at source from the professional fee paid to the partner for the services rendered by him/her. And if so then what is the threshhold limit upto which TDS deduction is not required.
Mu another query is that whether TDS deduction is required to be made from the stipend paid by such legal firm to the CS Trainee? Is their any threshhold limit for this also beyond which TDS becomes deductible?
16 February 2009
1) Pl refer section 194J of the income tax act,1961 for TDS from fee for professional services. 2) Stipend is tax free u/s 10(16)of the income tax act,1961 and hence no need to deduct tax.
16 February 2009
As per section 194J if any fee paid for professional or technical services exceeds Rs.20,000/- then TDS @ 10% is to be deducted and education cess of 3% on TDS is also to be deducted. If the total payment exceeds Rs10,00,000/- then the effective rate of TDS would be 11.33%.TDS-10%, Surcharge-10% on TDS, Education Cess-3% on TDS and surcharge.
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