TDS FOR LEASED LINES
This query is : Resolved
30 May 2008
TDS FOR LEASE LINES FALLS UNDER THE CATEGORY PROFESSIONAL / CONTRACT - ?
30 May 2008
Does not seem to fall under either. Can it be covered within the extended meaning of 194I?
30 May 2008
Does not seem to fall under either. Can it be covered within the extended meaning of 194I?
30 May 2008
i also think it shud fall under 194I as we can take it as equipments.
30 May 2008
The Same will Fall Under Contract and T.D.S would be Deducted at the Rate Specified in Sec 194C. Neither u are paying proffessional fees nor Technical Fees. In the above case u are entering into contract for leased line which is for certain period and once this period is completed u may have option to enter or exit from the contract.
So it is purely in the nature contract
So it is purely in the nature contract
30 May 2008
under 194J, it will clrearly not fall, there is also a Madras high court decision stating that it is not covered u/s sec. 194J.
Skycell Communications Ltd. v. Dy. CIT 251 ITR 53 (Mad)
but the characterstics given by Chirag also prevails in 194I, and even there is a equipment also. so, on that ground sec. 194I looks ahead in race.
but i have seen at some places that telephone and internet charges are out of tds purview. so, sky looks cloudy.
i paste a query from Business Line tax colum (u can find it on net):
Jan 21, 2008
Is tax required to be deducted at source on payment to a service provider for a leased line for data access?
Rajendra Jain, email
In Skycell Communications Ltd vs DCIT (2001 119 Taxman 496), the Madras High Court ruled that use of equipment and machinery does not tantamount to receipt of technical services. This then rules out deduction of tax under Section 194J. But it appears that one cannot ignore the mandate of Section 194-I, which calls upon a user to deduct tax at source on payment of rent for use of equipments and machinery.
It appears that the CBDT has not come out with any specific circular on this issue. Therefore, everyone including individuals and HUFs coming under the purview of tax audit in terms of Section 44AB may have to deduct tax at source on payments such as the one described by you.
Skycell Communications Ltd. v. Dy. CIT 251 ITR 53 (Mad)
but the characterstics given by Chirag also prevails in 194I, and even there is a equipment also. so, on that ground sec. 194I looks ahead in race.
but i have seen at some places that telephone and internet charges are out of tds purview. so, sky looks cloudy.
i paste a query from Business Line tax colum (u can find it on net):
Jan 21, 2008
Is tax required to be deducted at source on payment to a service provider for a leased line for data access?
Rajendra Jain, email
In Skycell Communications Ltd vs DCIT (2001 119 Taxman 496), the Madras High Court ruled that use of equipment and machinery does not tantamount to receipt of technical services. This then rules out deduction of tax under Section 194J. But it appears that one cannot ignore the mandate of Section 194-I, which calls upon a user to deduct tax at source on payment of rent for use of equipments and machinery.
It appears that the CBDT has not come out with any specific circular on this issue. Therefore, everyone including individuals and HUFs coming under the purview of tax audit in terms of Section 44AB may have to deduct tax at source on payments such as the one described by you.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- ITDS U/S.194T of Firm
- Unregistered suppliers utility
- Difference between Date of Payment and Date of Deduction?
- Journal entry of busniess expenses
- Same demand raised for original as well as rectification request return
- Sale of property held jointly with a non resident Indian
- GST not cancelled by tenant
- EXPORT COMMERCIAL INVOICE HSN CODE
- NRI starting business in India
- URGENT-Eligible leaves being shown as 24 days for 3 years Articleship instead of 156 days in 108
- Filling ITR - U
- Form 140 tds
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
