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Clarification of tds rate of hoarding advertisment

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This query is : Resolved

Chackappan Ouseph (Querist)

11 May 2018 I have running advertising business in Hoardings. I am purchasing hoarding from some one for the period of 1 month or one year. I deducted TDS as per 194c up to 31-3-18. Now some one insist that, TDS to be deduct as per 194I or 194IC.Please give me a correct suggestion

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

13 May 2018 You are being rightly told to deduct TDS U/s 194I as the nature of payment being made by you is of Rent.
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Under Section 194C your clients deduct TDS on adverisement charges payable to you but what you are paying
to the owners/holders of hoarding is not in the nature of advertisement. It is being paid by you to exercise control over the sites. You require a place or site for displaying Ads of your clients and against the same payments are being made by you. For the person to whom you are making payments is not having any interest as welll as control or advertising activities. So, it is basically Rental Charges.
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In my view deductio U/s 194I @ 10% is required to be deducted.
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