Tds deduction

This query is : Resolved

Rehbar Siamwala (Querist)
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27 February 2012 One of the vendor of our company being very clever, he has made us thought whether we should deduct TDS on the transaction or not.

The Vendor provided us advertisement services including printing and material of banners.

However the bills he presented are in the form of professional charges to the extent of 29800 and Bill for material of Rs. 30000/- which are claimed as reimbursement of expenses. Thus avoid TDS being deducted on the bill amount.

There was no specific contract with the vendor and the amount was decided to be paid on lumpsum basis as agreed.

Thus can we deduct TDS or not?
As per my opinion It can be considered as Advertisement contract but bills have been presented cleverly for which he may be considered within limits of TDS on professional or contract as per IT Act.

CA. Hari Kishan

CA. Hari Kishan (Expert)
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27 February 2012 Decoration or advertisement is a notified profession as per the meaning of professional service under 194J.. hence if a separate invoice is being raised for the same.. you shall be required to examine and comply to the provision of 194J and since the amount is less then 30000, you may not withhold TDS.. as to separate charges for provision of the material.. may be taken as a independent contract and you shall examine the provision under 194C.. so TDS is not liable to be deducted in my view..

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