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Tds on sitting fees

Piyush Verma (CA) (51 Points)

26 November 2012

Is TDS is to be deducted on sitting fees if the same is paid to the Chariperson of a Statutory Body ???

Whether it will attract service tax also ??

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Nithin Chettoor (Assistant Manager) (388 Points)
Replied 26 November 2012

Here is the new clause inserted giving effect to the recent budget and vide this, there is a requirement to deduct tax on any remuneration paid to the director @ 10% as it falls under the category of payments mentioned under section 194J. 194J. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of— [(ba) any remuneration or fees or commission by whatever name called, other than those on which tax is deductible under section 192, to a director of a company; Vide Notification No. 45/2012-ST, dated 7-8-2012 the payments for services provided by a director of the company to the company has been brought under the service tax network. And there is a specific exclusion for the services rendered in the nature of employer-employee relationship to the company. but sitting fees is not under this nature, hence is liable for service tax. The service tax is payable by the company who receives the services under reverse charge mechanism for the gross amount to the director as sitting fees.