TDS on Royalty

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This query is : Resolved

GURUKUMAR.S.K

GURUKUMAR.S.K (Querist)

29 April 2009 It is learned that TDS is to deducted for any payment of Royalty above Rs.20000/-. But let me ask you, If the business is a proprietory concern and its turnover is below 40 Lacs, is it necessary to deduct TDS on Royalty payments above Rs.20000/-

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

29 April 2009 If the turnover in the PRECEDING FINANCIAL YER is less than Rs.40 lakhs, tax need not be deducted in the CURRENT FINANCIAL YEAR. Ref:- Section 194J.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

30 April 2009 agree with expert

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)

30 April 2009 You will also have to see that whether in any year the turnover was above 40 lakhs or not since TDS becomes applicable if the T.O crosses 40 lakhs in any previous year.

taxindiaconnect

taxindiaconnect (Expert)

30 April 2009 The provisions of chapter XVII apply only to an individual an HUF only if that person liable to tax audit. A proprietorship is treated at par with an individual in Income tax Act, Hence the TDS is not applicable where the firm is not liable to tax audit, In your case the TDS is not applicable for this reason. However one has to see the have to see the position of tax audit requirement at the close of the immediately preceding year.

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