Tds on allowances paid to the employee of a sister company

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CA Manikandan.A.V (Querist)
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16 August 2012 Sir,

Under which section TDS need to be deducted if a company pays Rs.10,000/- pm to a skilled employee of a sister company for services rendered. There is no employer employee relationship and no contract in between them.

Advance Thanks for your opinion.

Regards,

Manikandan.A.V

CA Guru M

CA Guru M (Expert)
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16 August 2012 If there is no employee & employer relationship, then same will be treated as Professional fee/Consulting fee.

TDS to be made u/s 194J.

CA Manikandan.A.V

CA Manikandan.A.V (Querist)
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17 August 2012 Thanks ACA Guru M,

More opinions invited..

Jinesh Bhagdev

Jinesh Bhagdev (Expert)
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17 August 2012 I agree with Guru.. it wont fall under 194C and there is no contractor-contractee relationship. Further, specific provision overrides general provision.

Since you mentioned that the employee is the skilled labour, assuming that he is rendering technical / professional services, it clearly falls under 194J.

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