TDS U/S 194 J

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M.Arshad (Querist)

15 April 2008 Please let me know what will be effective TDS Rate for a firm of Advocates in respect of legal fees

XYZ & Associates
Advocates

Whether it will be trated as firm ??
plz let me knw TDS Rate,surcharge (if appl).

Sanjeev Kumar Sharma

Sanjeev Kumar Sharma (Expert)

15 April 2008 yes, it will be treated as firm
and and fee received will be treated as professional fee and tds rate is 10.3%

M.Arshad

M.Arshad (Querist)

15 April 2008 But dont u think if it is firm ,surcharge @10% will also be charged on 10% .

R.V.RAO

R.V.RAO (Expert)

15 April 2008 UNDER SEC 194J OF INCOME TAX ACT,TDS @10.3% WILL BE DEDUCTED ON THE ADVOCATES FEES PLUS SERVICE TAX @12.36% CHARGED BY THE ADVOCATES ON THE FEES.
R.V.RAO

R.V.RAO

R.V.RAO (Expert)

15 April 2008 YES MR.ARSHAD,IF THE AGGREGATE OF PAYMENT SUBJECT TO TDS EXCEEDS RS. TEN LAKHS ,THEN SURCHARGE OF 10% ON TAX IS ATTRACTED.THANKS FOR POINTING OUT.
R.V.RAO

M.Arshad

M.Arshad (Querist)

15 April 2008 I think there is some confusion,as per my knowledge ,in case of payment to a firm we need not to check 10 lakh limit .We will have 2 deduct TDS @ 10% plus surcharge 10% plus 3% edu cess ,total comes to 11.33 % ..

Subash Gaijes

Subash Gaijes (Expert)

15 April 2008 No Mr. Arshad. In the case of making a professional payment, the applicable Basic TDS Rate is 10%. If the payments you are going to make exceeds Rs. 10 Lakhs in a year, then surcharge of 10% will be applicable. In both cases TDS of 3% will be applicable. So the Cumulative rate will be as follows;

1. Without Surcharge : 10.3%
(Applicable if the payments in a year to the firm does not exceeds 10 Lakh)
2. WITH SURCHARGE : 11.33%
(Applicable if the payments to a firm exceeds 10 Lakh)

For better clarifications you can refer to the Income Tax Act or Reckoner