Tds under 194c or 194j?

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This query is : Resolved

Sk Jain (Querist)

20 April 2016 Hello Sir,
I am a Thyrocare Service Provider. Thyrocare is a diagnostic laboratory in which pathological tests are conducted. As a service provider, my job is to collect blood samples from local diagnostic centres(who outsource their services) and I have to send them to thyrocare. Thyrocare charges a B2B rate to me and I charge the outsourcing rate to that local diagnostic centre. In the whole process, no professional services or services requiring intellectual thinking is provided by me. The aggregate payment receivable by my from my local diagnostic centre clients exceed the threshold limit of applicable sections. My work is like that of a sub contract. However, I don't have any written contractual agreement with the diagnostic centres. So, the issue is this that while making paymemts, my client is deducting tds@10% u/s 194J, helding that, I being a resident individual, is rendering professional services as conducting pathological tests are covered under professional services. However, I am myself not conducting any tests and neither I have to sign the reports. The samples are processed by thyrocare, and reports are signed by Doctors of Thyrocare. So, after a plenty of discussion, my client contented that if he makes payment to my name, they will deduct TDS @10% u/s 194J, and if they make payment directly to the name of Thyrocare, TDS will be deducted @ 2% u/s 194C. However, my contention is that since am operating as a sub contractor, TDS should be deducted @ 1% as under 194C. Kindly, help in solving the issue and post the correct way out at the earliest.
Thank You.

Amol S Joglekar

Amol S Joglekar (Expert)

21 April 2016 In stead of arguing with your service receiver, make an application to your jurisdictional Assessing Officer requesting him/her to give a letter to your service receiver to deduct the tax at xxxx rate. I think that will solve your query.

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