Tds

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Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2011 1. How to differenciate particular transaction under section 194C or 194J?
2. Does lodging charges paid come under purview of 194I?

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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10 September 2011 1. CAN U WRITE HERE ABOUT TRANSACTION
2. NO, UNDER 194I TRANSPORT CHARGES NOT INCLUDED

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Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2011 Installation of AMC (Electric instrument) will be considered as contractor or professinal.

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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10 September 2011 its in nature of contract.not here any profession or technical guide require

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Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2011 As you said lodging & Boarding expenses are not covered u/s 194I then what section applies to it?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 Great questions. Let's address each of your points step-by-step with clarity, referencing relevant sections of the Income Tax Act, 1961:

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## ✅ **1. How to Differentiate Between Section 194C and Section 194J?**

| Criteria | **Section 194C** – Works Contract / Contractual Payment | **Section 194J** – Professional / Technical Services |
| ----------------------------- | -------------------------------------------------------- | --------------------------------------------------------------------------------------------- |
| **Nature of Service** | Execution of a contract (works, supply, transport, etc.) | Rendering of professional or technical expertise |
| **Examples** | AMC, fabrication, construction, printing, catering | Legal, medical, architectural, engineering, software consultancy, technical/advisory services |
| **Requirement of Expertise?** | Not necessarily | Yes, involves specialized professional knowledge |
| **TDS Rate (domestic)** | 1% (individual/HUF) or 2% (others) | 10% |
| **Section Reference** | Section 194C | Section 194J |

### 🔹 **Rule of Thumb**:

* If it involves **specialized knowledge or intellectual skill**, it falls under **194J**.
* If it’s just **execution or maintenance work** without professional input, it’s under **194C**.

> ⚙️ **Example – AMC (Annual Maintenance Contract)**:

* If AMC involves **routine maintenance (e.g., cleaning, checking wiring)** → **194C**.
* If AMC involves **highly technical or diagnostic expertise (like MRI machine, software)** → **194J**.

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## ✅ **2. Are Lodging Charges Covered Under Section 194I?**

🔹 **Section 194I** applies to **rent**, including payment for **use of land, building, machinery, plant, equipment**, etc.

So,

* **Lodging charges** (e.g., staying in a hotel) are generally **not considered "rent" under 194I**, unless:

* There is a **long-term lease or commercial arrangement** for space (e.g., company rents hotel rooms on fixed terms).

➡️ **Normal hotel accommodation payments** = **No TDS under 194I**

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## ✅ **Then What Section Applies to Lodging/Boarding?**

It depends:

| Situation | Applicable Section |
| ------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------ |
| Individual reimbursing or paying personal travel/hotel expenses | ❌ No TDS |
| Company booking hotel stay for employees/vendors (case by case) | Could fall under **194C** (contractual services) if part of a travel agency agreement or hospitality package |
| Hotel is contracted for **long-term corporate lease or fixed rental use** | ✅ **194I** (Rent) applies |

> ✅ **CBDT Circular No. 715, Q.20**:
> Hotel accommodation taken on a regular basis under a **contractual arrangement** may fall under **Section 194C**.

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## ✅ Summary of All Points

| Query | Answer |
| ---------------------------------- | ---------------------------------------------------------------------------------------- |
| 194C vs. 194J? | Depends on whether work is routine (194C) or technical/professional (194J) |
| Lodging charges = 194I? | ❌ Not usually. Only if there is a fixed rental/lease arrangement |
| AMC for electric instruments? | If routine – **194C**; if involves technical diagnostics – **194J** |
| Boarding & lodging – What section? | If via contract – **194C**; if rent-like – **194I**; if individual/personal – **No TDS** |

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Let me know if you’d like help framing this as a note to management or in response to a department query.

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