Tds on gift

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This query is : Resolved

prahlad Rana (Querist)

28 July 2012
Dear Sir,
pls. resolve the matter

We Design a logo for our company.and paid for the same for his technicak work. beside this we have aslo commited that we will present some gift if this job is fine.
so for his good job we have also paid him, for Rs 175000,CHQ, agaist the bill of a TV which he has purchase on our behlaf.

now pls tell me should dedduct TDS on this payment ,if so at what rate and under which section.

Thanks and regard
Prahlad S Rana
9250316877

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

28 July 2012 In my view, the Reward is based on the work performed by the technical professional and the same has to be treated by your company as cost incurred for the purpose of logo. It can easily be established that the direct or indirect expenditure incurred for logo has been incurred exclusively for the business
purpose.
.
From the recipient's point of view , its his professional income, as the perquisite is the fruit of the professional services rendered by him.
.
TDS has to be deducted U/s 194J .
.
Amount of TDS to be deposited as
175000x10/90=19444.
.

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