Reg - TDS on government payment

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This discussion clarifies whether Tax Deducted at Source (TDS) applies to payments made to the government for services, such as obtaining an Environment Clearance Certificate through a private concern. Experts confirm that according to Section 196 of the Income Tax Act, TDS is generally not applicable on sums payable to the Government, the Reserve Bank of India, or certain tax-exempt corporations.

RevathyBaskar

RevathyBaskar (Querist)

15 November 2022 Dear Experts
As we are constructing hospital building in this regard we would like to go for Environment Clearance Certificate through a private concern. now the concern informed that we to pay scrutiny fee to government now my question is whether the payment has to done by deducting TDS are not. Experts Kindly Advise me

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

15 November 2022 TDS not applicable on Government payment.

Section 196. Notwithstanding anything contained in the foregoing provisions of this Chapter, no deduction of tax shall be made by any person from any sums payable to—
(i) the Government, or
(ii) the Reserve Bank of India, or
(iii) a corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income-tax on its income.

RevathyBaskar

RevathyBaskar (Querist)

15 November 2022 Sir Thanks for your valuable advise & time

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

15 November 2022 You are welcome....

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