Applicability of tds rules for the professional service

TDS 395 views 6 replies

Sanand Kumar

Director

28 Points Joined June 2015

Sir,

We are private limited company. We have outsourced our website development to a team of professionals through freelancer.com. The professional fees is Rs. 52k which will be paid through freelancer.com.

The freelancer.com will charge 3% for the employer and 10% for the freelancers. And we don't have option to make TDS deposit through this website.

I would like to know, are there any kind of rules applicable for this kind of cases under Tax Law. Should I have to deduct TDS? if yes How can I do it? And How much I have to deduct?

Please help me in this regard.

Thank you

Replies (6)

CMA Poornima Madhava

CMA

13117 Points Joined May 2009

It is quite confusing I think, Ok in this case, whom will u be paying? how much?

Sanand Kumar

Director

28 Points Joined June 2015

Thanks for your reply. We will be paying web development professionals who are working in India only. They are selected through bidding process.

The freelancer.com is a australia based company. We will be paying Rs. 52, 000/- (plus 3% process fee+ 2.45% deposit fees through credit card)

CMA Poornima Madhava

CMA

13117 Points Joined May 2009

Ok, so in that case, the payee will be freelancer.com, Australia. In this case, u need to deduct TDS u/s 195 @ 30% + EC @ 3%. That means u will have gross up the amount. Since u say u would be making payment thru credit card, form 15CA, 15CB may not be required I think.

Sanand Kumar

Director

28 Points Joined June 2015

Dear madam,

I appreciate your time and knowledge for answering the queries. Thank you.

The website owner has not provided the PAN no. which is supposed to be registered in India. In this case how can I deduct TDS. Are their any similar cases where I can refer to? It would be so nice of you if you elabarate little bit.

thank you in anticipation.

CMA Poornima Madhava

CMA

13117 Points Joined May 2009

Even if there is no PAN, u can deduct 30% in this case. Bcoz, rate of tax applicable, if no PAN means, 20% or the rate in force (i.e. 30% in this case), whichever is higher. For more details:

https://www.sircoficai.org/downloads/cpe-materials/Section_195_related.pdf

https://www.incometaxindia.gov.in/Charts%20%20Tables/TDS%20Rates.htm