194j - professional fees before incorporation!!

TDS 587 views 3 replies

Anju

Accountant

29 Points Joined June 2015

A Pvt Ltd Company has been incorporated at 4-12-2014. Before this date i.e. 6-10-2014, the now- director had paid professional fees to a law firm for some legal works. Now, Query is whether the company in question is required to pay TDS for the aforesaid fees and if yes, how is it supposed to deduct the TDS if the payment has already been made and further, the company has ceased its involvement with that legal firm after that payment.

Replies (3)

Z

Tax Consultation (US and India)

2970 Points Joined September 2011

I dont think that TDS is applicable here

Co. was not in existence,the contract is also not with the Co.

194J. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident

Person responsible for making the payment must be the directors [Individuals]

& Individuals are not required to deduct tax unless

"an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum by way of fees for professional services or technical services is credited or paid, shall be liable to deduct income-tax under this section "

Atmost directors/promoters could be liable to deduct TDS, but definitely not the Co.

Other views possible and are welcomed