Tds on ownership royalty
This query is : Resolved
Neha Gupta
(Querist)
25 September 2013
Ownership royalty paid to an individual sub contractor liable to TDS under which Sec 194C or 194J?
Ashwani Narnoli
(Expert)
25 September 2013
plz elaborate ur question.
Neha Gupta
(Querist)
25 September 2013
Ownership royalty is paid to Quarry owner who is our sub contractor for providing his mining licence to us on which TDS is to be deducted.
Now, my ques is whether to deduct TDS under Sec 194C or 194J?
Now, my ques is whether to deduct TDS under Sec 194C or 194J?
Deepak Agrawal
(Expert)
03 September 2016
please answar anyone
27 July 2025
For **ownership royalty** paid to an individual sub-contractor like a quarry owner for providing the mining license, the relevant TDS section depends on the nature of payment:
* **Section 194C** applies to **payment to contractors or subcontractors** for carrying out any work (including supply of labor for carrying out work).
* **Section 194J** applies to **fees for professional or technical services**, including royalty payments.
---
### In your case:
* The payment is for **ownership royalty** for **mining license**, which is basically a royalty payment for using a property/license.
* **This is NOT a payment for work or contract service.**
* So, **TDS should be deducted under Section 194J (Fees for professional or technical services including royalty).**
---
### Summary:
| Payment Type | TDS Section Applicable |
| -------------------------------------------------- | ---------------------- |
| Ownership royalty to quarry owner (mining license) | Section 194J |
| Payment for contract work or labor | Section 194C |
---
**Note:** Make sure to check if the individual has provided a PAN to apply correct TDS rate, and if the payment qualifies as royalty under Income Tax Act definition.
If you want, I can help you draft a quick advisory note for your team on this!
* **Section 194C** applies to **payment to contractors or subcontractors** for carrying out any work (including supply of labor for carrying out work).
* **Section 194J** applies to **fees for professional or technical services**, including royalty payments.
---
### In your case:
* The payment is for **ownership royalty** for **mining license**, which is basically a royalty payment for using a property/license.
* **This is NOT a payment for work or contract service.**
* So, **TDS should be deducted under Section 194J (Fees for professional or technical services including royalty).**
---
### Summary:
| Payment Type | TDS Section Applicable |
| -------------------------------------------------- | ---------------------- |
| Ownership royalty to quarry owner (mining license) | Section 194J |
| Payment for contract work or labor | Section 194C |
---
**Note:** Make sure to check if the individual has provided a PAN to apply correct TDS rate, and if the payment qualifies as royalty under Income Tax Act definition.
If you want, I can help you draft a quick advisory note for your team on this!
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