Tds on advt. in govt. journal/hand books

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Querist : Anonymous

Querist : Anonymous (Querist)

30 January 2012 Is TDS applicable for advertising or sponsorship in govt.journal/hand books

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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31 January 2012 Section 196:
No deduction of tax shall be made from any sum payable to the Govt. .

CA Jayesh Shah

CA Jayesh Shah (Expert)
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31 January 2012 I think TDS should be deducted, Because Section 194C says the TDS should be deducted for any contract between contractor and the person Specified, and explanation (i)(a)includes central and State government in definition of Specified Person.

And Section 196 is for any payment made to central government and State government by way of interest, dividend or any other sum in the nature of interest..

CA PARAS BAFNA

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31 January 2012 Section 194C: Explanation
.
Specified person referred to in Section 194C includes both State & Central Governments as rightly pointed out by CA Jayesh Shah.
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However, the duty assigned to the specified person (SP) in the said section is towards making tax deduction.

SP is a contractee or can be said as payer of the contract amount to the Contractor.

Whereas, from the query, prima facie, it seems that the Govt. is being engaged as an advertising agency or as a contractor.
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The advertiser will be treated as specified person for the purpose of discharging his obligation as the Deductor.
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Section 196:
It's applicability can not be limited to merely Interest or Dividend payable to the Govt. as the section ends with the phrase " or any other income accruing or arising to it (Govt.).