Deduction of tds (194j) - testing charges

as per my view tds liability doesn't arise. let's wait for experts advice

196. 2 Interest or dividend or other sums payable to Government, Reserve Bank or certain corporations Notwithstanding anything contained in the foregoing provisions of this Chapter, no deduction of tax shall be made by any person from any sums payable to-

(i) the Government, or

(ii) the Reserve Bank of India, or

(iii) a corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income- tax on its income, or

(iv) a Mutual Fund specified under clause (23D) of section 10, where such sum is payable to it by way of interest or dividend in respect of any securities or shares owned by it or in which it has full beneficial interest, or any other income accruing or arising to it.]

Not required to deduct TDS

above quoted is section 196

1. The above expense will be liable for TDS deduction as it is a fees in the nature of technical services.

@ peter so how does it make a y difference?

in my view since its a government body , there is no need to deduct tds...
the same way when u are making a payment to BIS , they have expressly provided that tds should not be deducted.

Thanks a lot sir's, For providing your opinion. But, I have been asked to deduct TDS from cited payment by a practicing CA. What should I do now? Please suggest.

CAs always take the safer side. Now actually its in your hand to deal with the topic. You can also refer section 196 to your CA and ask his opinion in that regard.

and you can also ask him why he wants you to deduct the TDS. By the way will the national test house agree with you if you deduct the TDS. that is also to be seen.

 

CA Mayur Thakkar

M. no. 8530089839

Thanks a lot sir for your kind advise..

Dear Sir,

I have also gone thorugh sec. 196. accordingly I am not willing to deduct tax. Meanwhile, I have been asked by National Test House to avoide deduction of TDS from "Testing Service Charges".

Regards,

Ravi