Tds

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Mohit

Mohit (Querist)
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22 May 2019 tds applicable on AMC but not on insurance premium why? kindly ref sec please.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 May 2019 Insurance companies are reputed companies like banks they will account their income rightly hence no TDS envisaged refer 194 section.

Mohit

Mohit (Querist)
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22 May 2019 THANKS FOR ASNSWER. BUT STILL WAITING FOR SATISFACTORY ANSWER.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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27 July 2025 Great question! Here’s a clear explanation:

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### **TDS on AMC vs Insurance Premium**

| Payment Type | Is TDS Applicable? | Relevant Section | Reason/Notes |
| ------------------------------------- | ------------------ | --------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- |
| **AMC (Annual Maintenance Contract)** | Yes | Section **194C** (Contractor) or sometimes 194J (Professional Fees) depending on nature | AMC is considered a **service contract** payment, so TDS applies. |
| **Insurance Premium** | No | N/A | Insurance premium is **not treated as fees for services or contract** under Income Tax Act; hence no TDS. |

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### Detailed Explanation:

* **AMC:**
AMC is payment for **maintenance/service** provided regularly. Under **Section 194C** (payment to contractors) or sometimes **Section 194J** (fees for professional services), TDS is deductible if the payment crosses threshold limits.

* **Insurance Premium:**
Payment of insurance premium is considered a **capital expenditure or business expense** but **not a payment for services or contract** as per TDS provisions. Hence, **TDS is not deductible on insurance premiums**.

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### Reference:

* Section **194C** applies to payments to contractors for work done including supply of labor.
* Section **194J** applies to fees for professional or technical services.
* No section mandates TDS on **insurance premium**.

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If you want, I can help you find official CBDT circulars or Income Tax Act excerpts to keep as documentary proof! Would you like that?

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