Agreement for consultancy/technical services - 194j vs 194c
This query is : Open
19 December 2015
Hi Everyone,
Pls help:
My company has signed consultancy agreement, another one for technical services. My question is whether payment made under such agreement will be covered under 194J @ 10% TDS or under 194C @2% TDS.
Though it is a contract, so it should be covered under 194C, but nature of service is technical and professional service, so it should be covered under 194J.
I am bit confused.
Kindly help.
What if i deduct TDS @ 10% on safer side u/s 194J?
Pls help:
My company has signed consultancy agreement, another one for technical services. My question is whether payment made under such agreement will be covered under 194J @ 10% TDS or under 194C @2% TDS.
Though it is a contract, so it should be covered under 194C, but nature of service is technical and professional service, so it should be covered under 194J.
I am bit confused.
Kindly help.
What if i deduct TDS @ 10% on safer side u/s 194J?
Ankur Singhal
(Expert)
19 December 2015
Dear Vinesh Deduct TDS under section 194J @ 10%.
It does not make difference that a contract was entered. We have to see the service from which the income is being derived.
Section 194J is reproduced below.
Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of—
(a) fees for professional services, or
(b) fees for technical services, or
(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, or
(c) royalty, or
(d) any sum referred to in clause (va) of section 28,
shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax
It does not make difference that a contract was entered. We have to see the service from which the income is being derived.
Section 194J is reproduced below.
Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of—
(a) fees for professional services, or
(b) fees for technical services, or
(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, or
(c) royalty, or
(d) any sum referred to in clause (va) of section 28,
shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax
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22 December 2015
Thansk a lot.
But I had deposited the same u/s 194C in earlier months. Now what should I do? Do I need to rectify? What should be done? Pls guide.
But I had deposited the same u/s 194C in earlier months. Now what should I do? Do I need to rectify? What should be done? Pls guide.
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