Fees Paid to Architect with Construction or material

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This discussion clarifies the tax treatment of architect fees, especially when construction and materials are involved. If fees are separate from construction with materials, Section 194J (10%) applies to professional fees. If the contract includes construction with materials, Section 194C (2%) is relevant. For expenses around £15,00,000 for construction with materials and £5,00,000 for fees, regular maintenance and repair costs can be expensed, while other costs should be capitalised as fixed assets.

Hiru Dada

Hiru Dada (Querist)

03 November 2021 Fees Paid to Architect Rs.20,00,000 with Construction and Material is this exp. book capitalized or TDS applicable 194J 10% OR work contract 194C 2%

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

03 November 2021 If the contract is for construction of any property with material, sec. 194C would be applicable; provided the professional fees are separately charged. For professional fees sec. 194Jb will get attracted.

Hiru Dada

Hiru Dada (Querist)

03 November 2021 Expenses Book Repairing Maintenance or Capitalized in Fixed Asset amount approx 15,00,000 construction with material and 5,00,000 fees

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

03 November 2021 If it is regular maintenance & repairing cost, you can book expense, otherwise capitalize it.

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