TDS on Telephone & Insurance Expenses

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Vicky..!! 4m del........ (Querist)
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25 January 2010 Could anybody suggest me that when telephone expenses exceeeds the limit of 50,000 during the financial year & Paid to Companies like Airtel & So on, and same regarding insurance expenses incurred in relation to private sector companies, whether TDS has to be deducted or not, and if no, then whatz the reason? Could U please tell me where it is written in the act regarding both these expenses?

Ram Avtar Singh

Ram Avtar Singh (Expert)
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25 January 2010 TDS not applicable on Telephone exps.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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25 January 2010 Agree with Mr.Ram & Insurance payments also not attracted TDS

Vicky..!! 4m del........

Vicky..!! 4m del........ (Querist)
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25 January 2010 Colud u Please tell me where it is mentioned in the act regarding thses expenses?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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25 January 2010 Dear Sawan Kumar

Please go through Sec.194C fully

Vicky..!! 4m del........

Vicky..!! 4m del........ (Querist)
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29 January 2010 sir i had gone through 194 C many times, but i dont know what does u want to refer to? please clear this for me? its really urgent........

Vicky..!! 4m del........

Vicky..!! 4m del........ (Querist)
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29 January 2010 really urgent...........

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 Got it! Here’s a clear explanation on why **TDS is not applicable on Telephone and Insurance expenses** and where this is reflected in the Income Tax Act:

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### 1. **TDS on Telephone Expenses**

* Telephone bills are considered as **utility expenses**.
* **Section 194C** deals with **payments to contractors** (for work, supply of labor, etc.) — telephone bills don’t qualify as contract payments.
* **Section 194J** covers **fees for professional or technical services** — telephone bills do not qualify here either.
* Therefore, **no specific provision mandates TDS deduction on telephone bills**, regardless of the amount.
* This is a standard industry practice and accepted by tax authorities.

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### 2. **TDS on Insurance Expenses**

* Insurance premium payments (other than some specific cases like insurance commission) are payments for service but **do not fall under Sections 194C or 194J**.
* No TDS is prescribed under the Income Tax Act on insurance premium payments.
* If insurance agents or brokers receive commission, then TDS is applicable on commission under **Section 194H**, but not on the insurance premium paid to insurance companies.

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### Where does the law say this?

* The Act **specifies only certain types of payments on which TDS must be deducted** (like salaries, interest, professional fees, contract payments, rent, commission, etc.).
* Since **telephone bills and insurance premiums do not fall under these categories, no TDS applies**.
* **Section 194C**, 194J, 194H, and related provisions do not mention telephone or insurance premium payments.
* Circulars and clarifications from CBDT also confirm **no TDS on telephone and insurance premiums**.

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### Summary:

| Expense Type | TDS Applicable? | Relevant Section / Notes |
| ------------------ | --------------- | ----------------------------------------------------------- |
| Telephone Expenses | No | Not covered under Sections 194C/194J or any TDS section |
| Insurance Premiums | No | TDS only on commission paid (Section 194H), not on premiums |

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