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

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