Tds on testing charge
This query is : Resolved
01 April 2014
I want to know tds on testing charges for special type of test would come under which section i.e Sec-94C or 94J.
Also, please explain reason for supporting your answer
Also, please explain reason for supporting your answer
02 April 2014
it would be taxable under 194j beacause spcial type of testing any lab testing requires professional knowledge and would be taxable under professional services
02 April 2014
Since i'm unable to relate this anywhere under sec-194J. So,please share relevant extract of law to support your answer.
27 July 2025
Sure! Here's a clear explanation about **TDS on testing charges** and why it falls under **Section 194J** rather than 194C, along with relevant legal support:
---
### 1. **Which Section Applies?**
* **Section 194J** of the Income Tax Act deals with **TDS on Fees for Professional or Technical Services**.
* Testing charges for special types of tests (like lab tests, quality tests, scientific analysis) involve **specialized knowledge, skill, and expertise**.
* Such services are considered **professional or technical services**.
* Hence, **TDS on testing charges is to be deducted under Section 194J at 10%**.
---
### 2. **Why Not Section 194C?**
* **Section 194C** covers payments to contractors for works contracts or supply of labor or goods as part of a contract.
* Testing charges are **not a contract for works or labor supply** but a **fee for service**.
* Testing services require **technical expertise**, not just physical work or supply.
---
### 3. **Relevant Legal Extracts**
* **Section 194J(1)** states:
> "Any person responsible for paying to any resident any fees for professional services or fees for technical services shall, at the time of payment, deduct income-tax thereon at the rates in force."
* **Explanation 2 to Section 194J** defines **Professional services** as:
> "Services rendered by a person in the discipline of accountancy, interior decoration, technical consultancy, industrial consultancy, legal, medical, architectural, engineering, or like professions."
* Testing charges involving **technical consultancy or laboratory testing** fall within this scope.
---
### 4. **Supporting Circulars & References**
* CBDT Circular No. 715 dated 13-06-1997 clarifies that fees for technical services including laboratory testing are covered under Section 194J.
* The CBDT's clarification explicitly includes **testing services by labs or specialists as professional/technical services**.
---
### Summary:
| Nature of Payment | Applicable TDS Section | Rate | Reason |
| ------------------------------------ | ---------------------- | ---- | ----------------------------------------- |
| Testing Charges (Lab, Special Tests) | Section 194J | 10% | Considered professional/technical service |
---
If you want, I can help draft a formal note or letter citing these references for your use. Would you like that?
---
### 1. **Which Section Applies?**
* **Section 194J** of the Income Tax Act deals with **TDS on Fees for Professional or Technical Services**.
* Testing charges for special types of tests (like lab tests, quality tests, scientific analysis) involve **specialized knowledge, skill, and expertise**.
* Such services are considered **professional or technical services**.
* Hence, **TDS on testing charges is to be deducted under Section 194J at 10%**.
---
### 2. **Why Not Section 194C?**
* **Section 194C** covers payments to contractors for works contracts or supply of labor or goods as part of a contract.
* Testing charges are **not a contract for works or labor supply** but a **fee for service**.
* Testing services require **technical expertise**, not just physical work or supply.
---
### 3. **Relevant Legal Extracts**
* **Section 194J(1)** states:
> "Any person responsible for paying to any resident any fees for professional services or fees for technical services shall, at the time of payment, deduct income-tax thereon at the rates in force."
* **Explanation 2 to Section 194J** defines **Professional services** as:
> "Services rendered by a person in the discipline of accountancy, interior decoration, technical consultancy, industrial consultancy, legal, medical, architectural, engineering, or like professions."
* Testing charges involving **technical consultancy or laboratory testing** fall within this scope.
---
### 4. **Supporting Circulars & References**
* CBDT Circular No. 715 dated 13-06-1997 clarifies that fees for technical services including laboratory testing are covered under Section 194J.
* The CBDT's clarification explicitly includes **testing services by labs or specialists as professional/technical services**.
---
### Summary:
| Nature of Payment | Applicable TDS Section | Rate | Reason |
| ------------------------------------ | ---------------------- | ---- | ----------------------------------------- |
| Testing Charges (Lab, Special Tests) | Section 194J | 10% | Considered professional/technical service |
---
If you want, I can help draft a formal note or letter citing these references for your use. Would you like that?
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