Tds on royalty

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Hi My Company is dealing in franchisee Business and just started and i have a confusion of TDS amount deduction is it 2% or 10%
Replies (2)

If the Payment is in the nature of Royalty, TDS needs to be deducted u/s 194J, if a single amount exceeds Rs. 30000/- or annual payment exceeds Rs. 100000/- otherwise if the payment is in nature of commission, TDS to be deducted u/s 194H. Whatever the case may be, TDS Rate will be 10% only. In no case, TDS can be deducted u/s 194C @ 2%. 

Since, Section 194C states that any person responsible for paying any sum to resident contractor for carrying out any work.

The expression "work" in this section would include-

  1. advertising;
  2. broadcasting and telecasting including production of programs for such broadcasting or telecasting;
  3. carriage of goods and passengers by any mode of transportation, other than railways;
  4. catering;
  5. Manufacturing or supplying of a product according to the requirement or specification of a customer by using the materials purchased from such customer, But does not include manufacturing or supplying of a product according to the requirements or specifications of a customer by using the materials purchased from a person, other than such a customer.

 

Thus you may have to deduct TDS @ 10% only and mostly the payments are in the nature of Royalty and so liable u/s 194J

Thanku Sir 


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