TDS ON MOTIVATION SPEAKER FEES??

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This discussion clarifies the TDS deduction applicable to fees paid to a motivation speaker, who charged 'Consultancy Fees'. Based on the invoice details and typical tax interpretations, the applicable TDS rate is 10% under Section 194J, as consultancy fees generally fall under professional or technical services. The TDS is calculated on the base consultancy fee amount before GST, resulting in a deduction of Rs. 119,800 on a Rs. 1,198,000 fee. It's recommended to consult a tax professional for definitive advice and to ensure correct tax compliance, including timely deposit of TDS and issuance of certificates.

praveen Nautiyal

praveen Nautiyal (Querist)
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24 January 2024 Our company has organize an event of motivation for company staff, he is charged fees 1198000+18% = 129800, and he his mentioned "Consultancy Fees" on Invoice.

now Please tell me how tds will deduct on which section?? 194J-10% or 2% ?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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11 July 2024 Based on the information provided:

- The consultancy fees charged are Rs. 1,198,000.
- An additional 18% GST has been applied, making the total invoice amount Rs. 1,418,040.

Now, regarding TDS deduction under Section 194J of the Income Tax Act, there are two possible rates depending on the nature of the payment:

1. **10% TDS under Section 194J**: This rate applies to fees for professional or technical services. However, it's important to note that "consultancy fees" typically fall under this category.

2. **2% TDS under Section 194C**: This rate applies to payments for contracts. Sometimes, consultancy services could be interpreted as falling under this category if they are considered contract payments rather than professional services.

Given that the invoice specifically mentions "Consultancy Fees," and assuming the services rendered qualify as professional or technical services (which is likely for consultancy), **the applicable TDS rate would be 10% under Section 194J**.

Therefore, for the consultancy fees of Rs. 1,198,000, the TDS amount to be deducted would be 10% of this amount.

Calculation:
TDS Amount = Consultancy Fees × TDS Rate

So, the TDS to be deducted would be Rs. 119,800.

Ensure to deposit this TDS amount with the government within the specified due dates and issue a TDS certificate to the consultant in Form 16D. It's always advisable to consult with a tax expert or CA to ensure compliance with all tax regulations.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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