Tds rate for production of commercial ads
This query is : Resolved
14 November 2011
Please tell me the TDS rates for "Creation of commercial ads" Is it comes under 194C or 194J.
please give reference.
please give reference.
14 November 2011
under 194c
15 November 2011
Please tell me the TDS rates for "Creation of commercial ads" Is it comes under 194C or 194J.
please give reference.
please give reference.
28 July 2025
Great question. The **TDS applicability** for **creation/production of commercial advertisements** has historically generated confusion between **Section 194C (contracts)** and **Section 194J (professional/technical services)**.
Let’s clarify it in detail, with references to law and circulars relevant to **FY 2011–12 (your query date: Nov 2011)**.
---
## ✅ **TDS Applicability: Creation of Commercial Advertisements**
### 🧾 **Section 194C** – TDS on Contracts
* Applies to payments to a contractor for **carrying out any work**, including:
> “Advertising” (specifically mentioned in the Explanation to Sec 194C)
💡 So, **production of a commercial ad** (TV, print, radio) is considered as a **contractual work for advertisement**.
➡️ Therefore, **TDS under Section 194C** is applicable.
---
## 🔖 Supporting Reference:
### 📘 **CBDT Circular No. 715, dated 8 August 1995**
This is a crucial reference.
#### Q.1: Whether TDS is required to be deducted under section 194C or 194J for advertising contracts?
**A:**
> **Payment for advertising** is subject to **TDS under Section 194C**.
#### Q.2: Whether the payment made to a film producer or production house for production of a film/documentary/advertisement film attracts TDS under section 194C?
**A:**
> Yes, since it's a **contract for work**, TDS applies **u/s 194C**.
---
## 🧾 Section 194J – Why it **does not** apply
* Section 194J is for **professional services**, like:
* Legal
* Medical
* Engineering
* Architectural
* Accountancy
* Technical consultancy
* While advertising agencies **may employ creative professionals**, the **contract is with the agency**, not individual professionals.
🔹 Hence, **no TDS u/s 194J** unless you're paying **an individual professional (e.g. an artist, photographer, designer)** directly for their creative input — in that case, **194J** may apply.
---
## ✅ **TDS Rate for FY 2011–12 (as of Nov 2011)**
| Section | Nature | TDS Rate |
| -------- | ---------------------------------------------------------- | ---------------------------------------- |
| **194C** | Payment to contractor for advertising | **1%** (individual/HUF), **2%** (others) |
| **194J** | Payment to advertising professionals directly (rare cases) | **10%** |
---
## ✅ Final Answer:
* **TDS for creation of commercial ads is covered under Section 194C**
* **Rate:**
* 2% if paid to company/firm
* 1% if paid to individual/HUF
* **Reference:** CBDT Circular No. 715, Q1 & Q2
* **Only in rare cases of direct payment to a creative professional, Sec 194J @ 10% applies**
---
Let me know if you’d like a case law or sample invoice TDS treatment.
Let’s clarify it in detail, with references to law and circulars relevant to **FY 2011–12 (your query date: Nov 2011)**.
---
## ✅ **TDS Applicability: Creation of Commercial Advertisements**
### 🧾 **Section 194C** – TDS on Contracts
* Applies to payments to a contractor for **carrying out any work**, including:
> “Advertising” (specifically mentioned in the Explanation to Sec 194C)
💡 So, **production of a commercial ad** (TV, print, radio) is considered as a **contractual work for advertisement**.
➡️ Therefore, **TDS under Section 194C** is applicable.
---
## 🔖 Supporting Reference:
### 📘 **CBDT Circular No. 715, dated 8 August 1995**
This is a crucial reference.
#### Q.1: Whether TDS is required to be deducted under section 194C or 194J for advertising contracts?
**A:**
> **Payment for advertising** is subject to **TDS under Section 194C**.
#### Q.2: Whether the payment made to a film producer or production house for production of a film/documentary/advertisement film attracts TDS under section 194C?
**A:**
> Yes, since it's a **contract for work**, TDS applies **u/s 194C**.
---
## 🧾 Section 194J – Why it **does not** apply
* Section 194J is for **professional services**, like:
* Legal
* Medical
* Engineering
* Architectural
* Accountancy
* Technical consultancy
* While advertising agencies **may employ creative professionals**, the **contract is with the agency**, not individual professionals.
🔹 Hence, **no TDS u/s 194J** unless you're paying **an individual professional (e.g. an artist, photographer, designer)** directly for their creative input — in that case, **194J** may apply.
---
## ✅ **TDS Rate for FY 2011–12 (as of Nov 2011)**
| Section | Nature | TDS Rate |
| -------- | ---------------------------------------------------------- | ---------------------------------------- |
| **194C** | Payment to contractor for advertising | **1%** (individual/HUF), **2%** (others) |
| **194J** | Payment to advertising professionals directly (rare cases) | **10%** |
---
## ✅ Final Answer:
* **TDS for creation of commercial ads is covered under Section 194C**
* **Rate:**
* 2% if paid to company/firm
* 1% if paid to individual/HUF
* **Reference:** CBDT Circular No. 715, Q1 & Q2
* **Only in rare cases of direct payment to a creative professional, Sec 194J @ 10% applies**
---
Let me know if you’d like a case law or sample invoice TDS treatment.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST registration /aadion a new place of business in the same state and city
- Overtime income in salaried person case
- Regarding Trading & Investment in Shares and MF in the context of Income tax return
- Correction in filed Form 27Q - showing error due to deductee contact number
- Reporting sale value mismatch for share transaction
- RCM invoice related QRMP
- Preparation of PL BS and presentation in ITR
- GTA (FCM & RCM) service in same GSTN registration with multiple business segment
- AMENDMENT OF GSTR-1 B2B
- CSR Applicability FY 2425
- Applicability of GST on gifts and perquisites
- TSD Query pertaining to Captial Gain - NRI in Saudi Arabia
- Business Income or Income from House Property
- Requirement of form 15CA (outward remittance)
- GST OFFICER WRONG NOTICE
- Credit Note entered twice
- Supporting document for trade name in GST
- Gst registration FY 2024-25
- Delay in filing Form 10 of a trust for asst year 23-24
- Form G for capital gain account closure
Trending Online Classes
-
Input Tax Credit, GST refunds and Recovery of refunds- Roadblocks and way outs
CA Nipun Arora03 September 2025 -
GST LIVE Certification Course - 43rd Weekdays Batch(With Govt Certificate)
Industry Expert15 September 2025
CAclubindia
