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Laxmi (Student) (74 Points)

28 April 2011

What is the threshold limit for TDS on consultants?RS. 20,000/- or Rs.30,000/-? This amout is monthly or yearly? If we are paying 3,000 monthly or 2,000 monthly we have to deduct 10% or not?

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8 Replies

(Guest)

IT IS 30000 FOR SINGLE BILL AND 75000 IN THE YEAR

IF YOU R PAYING 2000 OR 3000 MONTHLY THAN NO TDS

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Devendra (Chartered Accountant) (4775 Points)
Replied 28 April 2011

1) THE THRESHOLD LIMIT FOR CONSULTANCY FEES IS

RS. 30000 PER BILL

RS. 75000 AGGREGATE P.A

2) TDS @ 10% U/S 194J, IF DEDUCTEE PAN NO. IS NOT QUOTED THEN TDS @ 20%

3) NO TDS TO BE DEUCTED ON MONTHLY PAYMENTS OF RS. 2000 OR RS. 3000.

REGARDS,

DEVENDRA

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Manoj Sawant (Student) (138 Points)
Replied 28 April 2011

limit is 30000/-

if you pay chg 3000/- p.m. than No diduct tds

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CA Navin Jain (MANAGER (FINANCE & ACCOUNTS)) (11768 Points)
Replied 28 April 2011

TDS WUOULD BE DEDUCTED @ 10% UNDER SEC. 194J, IF PROFESSIONAL FEES IS PAID OR CREDITED EXCEEDING OF RS. 30000 AT ANY TIME DURING THE FINANCIAL YEAR

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siva thunder (article student) (253 Points)
Replied 28 April 2011

if it is single payment < 30,000

the overal annual payment < 75,000

if monthly payment is 2,000 or 3,000 then there is no need to deduct tds

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CA Navin Jain (MANAGER (FINANCE & ACCOUNTS)) (11768 Points)
Replied 28 April 2011

This limit is applicable under sec. 194C Payment to contractor

if it is single payment < 30,000

the overal annual payment < 75,000

Consultancy fee is not a contract its a professional fee, therefore tds would be deducted under section 194J

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Laxmi (Student) (74 Points)
Replied 02 May 2011

So..

For example we are deducting 7000/- p.m. So it comes to 7000*12=more than 75,000/- p.a. then we have to deduct 10% on Rs. 7,000/- ..?

AND if the amount is 30,000/- or more for sigle payment then also 10%..? Is it right..?

Rachit (Analyst) (913 Points)
Replied 02 May 2011

U/s. 194J which deals with TDS provisions on payment of fees for professional services, if the aggregate of sums credited/paid during a financial year exceeds Rs.30,000/- TDS is liable to be deducted.

Hence in your case since you are paying Rs.7,000/- p.m, the annual payment would consequently exceed Rs.30,000/- threshhold limit. TDS would therefore be liable to be deducted @ 10% every month.

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