Based upon which factors, the professional service can be differentiated from Technical Service
This query is : Resolved
21 December 2023
Dear Experts,
01. A company remitted the amount of Rs 150000.00 to its service provider towards getting the SSL certificate (Secure Sockets Layer) for the period of one year.
02.At this scenario, whether the company does need to deduct the TDS either under Technical Fees @2 % or under professional service @ 10%.
03. Please clarify.
04.Further request to clarify that on based upon which factors, the professional service can be differentiated from Technical Service.
01. A company remitted the amount of Rs 150000.00 to its service provider towards getting the SSL certificate (Secure Sockets Layer) for the period of one year.
02.At this scenario, whether the company does need to deduct the TDS either under Technical Fees @2 % or under professional service @ 10%.
03. Please clarify.
04.Further request to clarify that on based upon which factors, the professional service can be differentiated from Technical Service.
20 January 2024
It should come under 2% TDS
The main difference between technical service and professional service is the nature of the service provided. While professional services are based on the knowledge and expertise of the professional, technical services are based on technical expertise and skill. For example, a lawyer provides professional services, while an engineer provides technical services.
However, it is important to note that there can be instances where a service can be both technical and professional in nature. For example, an architect may provide technical services related to designing and engineering structures, but their services may also involve professional expertise in areas such as project management and cost estimation.
Under Section 194J, the TDS rate for fees paid for technical services is 2% of the payment, while the TDS rate for fees paid for professional services is 10% of the payment. This difference in TDS rates reflects the difference in the nature of the services provided.
However, determining whether a service is technical or professional can be challenging, as there are no clear guidelines or definitions provided by the Income Tax Act, 1961. In such cases, it is advisable to seek the opinion of a tax expert or consultant to avoid any potential tax liabilities.
The main difference between technical service and professional service is the nature of the service provided. While professional services are based on the knowledge and expertise of the professional, technical services are based on technical expertise and skill. For example, a lawyer provides professional services, while an engineer provides technical services.
However, it is important to note that there can be instances where a service can be both technical and professional in nature. For example, an architect may provide technical services related to designing and engineering structures, but their services may also involve professional expertise in areas such as project management and cost estimation.
Under Section 194J, the TDS rate for fees paid for technical services is 2% of the payment, while the TDS rate for fees paid for professional services is 10% of the payment. This difference in TDS rates reflects the difference in the nature of the services provided.
However, determining whether a service is technical or professional can be challenging, as there are no clear guidelines or definitions provided by the Income Tax Act, 1961. In such cases, it is advisable to seek the opinion of a tax expert or consultant to avoid any potential tax liabilities.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation of fixed assets- coop housing society in mumbai
- ADVANCE PAYMENT OF ADVOCATE
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- TDS on Consultancy- Non DTAA
- TDS Return Q1 FY 2026-27
- Condonation . E-Verification of last year return .
- CREDIT NOTES WITHOUT GST
- UNWANTED CREDIT BALANCE OF GST AS PER BOOKS
- GST rate and HSN code for sale of racing horses
- DIN reactivation
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
