TDS on payment of subscription charge to Job Portal
This query is : Resolved
12 October 2009
I am an individual-proprietorship doing business of manpower recruitment. I have taken the subscription of Naukri.com (Infoedge India) for one year recently.
For FY 2008-09 I have also undergone tax audit under section 44AB (income above 10L). My question is -
1. Am I liable to deduct TDS on the payment to Naukri.com (InfoEdge). The amount of payment is about Rs. 85,000 (two installments of Rs. 60,000 & 25,000)?
2. If yes, under what section TDS has to be deducted for such services?
Your reply is deeply apprecated.
Regards
Sandeep
For FY 2008-09 I have also undergone tax audit under section 44AB (income above 10L). My question is -
1. Am I liable to deduct TDS on the payment to Naukri.com (InfoEdge). The amount of payment is about Rs. 85,000 (two installments of Rs. 60,000 & 25,000)?
2. If yes, under what section TDS has to be deducted for such services?
Your reply is deeply apprecated.
Regards
Sandeep
12 October 2009
It would be more easy if the details of subscription were available.
Mostly TDS deductible u/s 194J for rendering professional service
Mostly TDS deductible u/s 194J for rendering professional service
12 October 2009
The subscription is for accessing the Naukri.com database for 1 year.
Hope this clairfies.
Regards
Hope this clairfies.
Regards
13 October 2009
I think by subscribing to Naukri , u get the following services . Database assess , a permanent login and a password is provided to you and help desk charges .Annual charges are levied every year.
I think these fall under "technical services " and would be TDS deductible u/s 194J @ 10%
This issue was considered by the Authority for Advance Rulings (AAR) in the case of Cargo Community Network (P.) Ltd. (2007; 158 Taxman 243). Its just that in this case the portal was hosted outside india ( in singapore)
The AAR held that these kinds of services are royalty & technical services
It would also depend on how infoedge raises the bill
I think these fall under "technical services " and would be TDS deductible u/s 194J @ 10%
This issue was considered by the Authority for Advance Rulings (AAR) in the case of Cargo Community Network (P.) Ltd. (2007; 158 Taxman 243). Its just that in this case the portal was hosted outside india ( in singapore)
The AAR held that these kinds of services are royalty & technical services
It would also depend on how infoedge raises the bill
13 October 2009
Thanks for your response. Here are the details of the description on the bill from InfoEdge (Naukri.com)-
"Towards Cost of: ResDex Non-IT Annual: Qty 1". Service tax has been charged. No other description is given in the invoice.
Just to ask an extreme question - is there any case for not deducting TDS at all?
"Towards Cost of: ResDex Non-IT Annual: Qty 1". Service tax has been charged. No other description is given in the invoice.
Just to ask an extreme question - is there any case for not deducting TDS at all?
27 July 2025
Great detailed query! Here’s the clarification on TDS applicability on subscription charges paid to job portals like Naukri.com (InfoEdge India):
---
### 1. **Is TDS Deduction Required?**
* Since you are paying for **subscription services** to access the Naukri database, it is considered as **payment for professional/technical services**.
* As you mentioned, you have undergone tax audit u/s 44AB (income above Rs 10 lakhs), so TDS provisions apply mandatorily.
* Hence, **yes, you are liable to deduct TDS** on the subscription amount.
---
### 2. **Applicable Section of TDS**
* The relevant section for TDS deduction on subscription services and similar professional services is **Section 194J**.
* **Rate of TDS:** 10% on the amount payable.
---
### 3. **Nature of Service & Taxability**
* Naukri.com subscription fees provide access to a **database**, login credentials, and related support — this is regarded as a **technical or professional service**.
* The fact that Service Tax is charged on the invoice further supports the service nature of the transaction.
* There was an AAR ruling (Cargo Community Network Pvt Ltd, 2007) which treated such services as technical services or royalty depending on where the portal is hosted. Since Naukri is India-based, the service is domestic and tax under Section 194J applies.
---
### 4. **Is There Any Case for Not Deducting TDS?**
* If the **subscription amount is below the threshold limit of Rs 30,000 per annum** under section 194J(2), TDS may not be required. But here, your payment is Rs 85,000 which is above this limit.
* If the payment is a **capital expenditure** or one-time fee for asset purchase, no TDS would apply. But recurring subscription fees are revenue expenses.
* So practically, **there is no valid case to avoid TDS deduction here.**
---
### **Summary Table**
| Particulars | Details |
| ----------------- | -------------------------------------- |
| Payment to | Naukri.com (InfoEdge India) |
| Nature of payment | Subscription for database access |
| TDS Applicable? | Yes |
| TDS Section | 194J (Professional/Technical Services) |
| Rate of TDS | 10% |
| Threshold for TDS | Rs 30,000 per annum |
---
**Note:** Deduct TDS while making payment, deposit the TDS with government on time, and issue TDS certificate (Form 16A) to InfoEdge India.
---
If you want, I can help you with a draft of TDS challan details or TDS certificate format. Would that help?
---
### 1. **Is TDS Deduction Required?**
* Since you are paying for **subscription services** to access the Naukri database, it is considered as **payment for professional/technical services**.
* As you mentioned, you have undergone tax audit u/s 44AB (income above Rs 10 lakhs), so TDS provisions apply mandatorily.
* Hence, **yes, you are liable to deduct TDS** on the subscription amount.
---
### 2. **Applicable Section of TDS**
* The relevant section for TDS deduction on subscription services and similar professional services is **Section 194J**.
* **Rate of TDS:** 10% on the amount payable.
---
### 3. **Nature of Service & Taxability**
* Naukri.com subscription fees provide access to a **database**, login credentials, and related support — this is regarded as a **technical or professional service**.
* The fact that Service Tax is charged on the invoice further supports the service nature of the transaction.
* There was an AAR ruling (Cargo Community Network Pvt Ltd, 2007) which treated such services as technical services or royalty depending on where the portal is hosted. Since Naukri is India-based, the service is domestic and tax under Section 194J applies.
---
### 4. **Is There Any Case for Not Deducting TDS?**
* If the **subscription amount is below the threshold limit of Rs 30,000 per annum** under section 194J(2), TDS may not be required. But here, your payment is Rs 85,000 which is above this limit.
* If the payment is a **capital expenditure** or one-time fee for asset purchase, no TDS would apply. But recurring subscription fees are revenue expenses.
* So practically, **there is no valid case to avoid TDS deduction here.**
---
### **Summary Table**
| Particulars | Details |
| ----------------- | -------------------------------------- |
| Payment to | Naukri.com (InfoEdge India) |
| Nature of payment | Subscription for database access |
| TDS Applicable? | Yes |
| TDS Section | 194J (Professional/Technical Services) |
| Rate of TDS | 10% |
| Threshold for TDS | Rs 30,000 per annum |
---
**Note:** Deduct TDS while making payment, deposit the TDS with government on time, and issue TDS certificate (Form 16A) to InfoEdge India.
---
If you want, I can help you with a draft of TDS challan details or TDS certificate format. Would that help?
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