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Tds

ritesh bansal (accountant) (55 Points)

25 September 2016

Is any software consultant who is paying consultancy fees to C.A for above to Rs.30000/- during the year for advice on his profession, he is also claiming this expense as professional expenses. Does he needs to deduct TDS u/s 194 J @ 10%. Is there any exemption limit for not deducting TDS for small trader or professional. Please advice.

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2 Replies

Deepak Gupta (CA Student) (15922 Points)
Replied 25 September 2016

TDS shall be deducted u/s 194J @ 10% as the sum > Rs. 30,000.

Note: An individual/HUF is exempted from deducting TDS u/s 194J, if tax audit was not applicable during the F.Y. immediately preceding the F.Y. in which income is paid/credited.

[Example: If tax audit was applicable to the assessee during F.Y. 15-16, assessee should deduct TDS during F.Y. 16-17 if the payment crosses the prescribed threshold, otherwise not.]

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CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 26 September 2016

Deduct tds @ 10% u/s 194J as under:
1)in case of individual /HUF- to be deducted only if he is a tax audit assessee and payment made to a professional or aggregate of such payments exceeds Rs.30,000.
2) Other cases- to be deducted in every case where payment or aggregate of payment exceeds Rs.30,000