TDS on consultancy

This query is : Resolved

SUNIL (Querist)
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23 March 2009 I need a clarification. a company is paying Rs. 1 Lac as surgery fees to a private hospital for treating one of its employee who met with an accident while working in factory. While making payment to hospital, should we deduct TDS on surgery fees.

CA LOKESH KASAT, FCA, M.Com

CA LOKESH KASAT, FCA, M.Com (Expert)
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23 March 2009 Yes you have to, and it should be under 194J.

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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24 March 2009 It is the nature of payment which is to be considered for the purpose of TDS. As such tax is deductible at source u/s 194J.

M KRISHNAKUMAR

M KRISHNAKUMAR (Expert)
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24 March 2009 company is an artificial person. so in my opinion it cannot render professional service. so no applicability u/s 194J

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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24 March 2009 Yes.
Tax needs to be deducted u/s 194J.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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24 March 2009 es.
Tax needs to be deducted u/s 194J

Sanjay Soni

Sanjay Soni (Expert)
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25 March 2009 In my opinion The Purpose of payment is to be looked. The purpose is to help the staff not expense for the company. as the Treatment of expense will be staff welfare or salary or else it may be loan to staff recoverable from him.

in all the scenerio no liability of deduction is attracted u/s. 194J as the service as taken is not in the nature of Professional/Technical as far as it concerned to The Company.

However if the expense is treated as Salary then the liability to deduct Tax attracted and again it can only be collected from employee.

Again in case the expense is treated as loan to employee adjustable from his/her salary then again the TDS attracted on advance payment of salary

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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26 March 2009 Section 194J just speaks about "any sum paid" and does not pay regard whether it is connected or not with the purpose mentioned.

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