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Tds

Aman (Accounts) (25 Points)

19 February 2016

is deduction of tds u/s 194j for payment of cell bill to airtel is right

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14 Replies

CA GOKUL RAJ R (Chartered Accountant) (151 Points)
Replied 19 February 2016

of couse in case of tax audit assessee individual, he has to deduct tax u/s 194J if the payment exceeds Rs.30000/- in a year.

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Arun Kumar (Auditor & Tax Practitioner) (168 Points)
Replied 19 February 2016

TDS will be deducted U/S 194C if he is an individual Tax Audit Assessee.

REGARDS

ARUN KUMAR

CA GOKUL RAJ R (Chartered Accountant) (151 Points)
Replied 19 February 2016

Change in definition of Royality as per Finance Act 2012, whether the payment of Mobile Bills, Broadband Charges, internet charges etc and Telephone Payments shall be made after deduction TDS under section 194J.

Arun Kumar (Auditor & Tax Practitioner) (168 Points)
Replied 19 February 2016

Dear Sir,

Please provoide me the Notification for the same..

Regards

Arun

CA GOKUL RAJ R (Chartered Accountant) (151 Points)
Replied 19 February 2016

Dear Sir,

I shall send the same once i got it. Can you please send the notification for 194C tds deduction on mobile bills.

Thanks

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Amit Kanunga (Article Assistant and Post Gradute) (644 Points)
Replied 19 February 2016

Yes Of Course ur correct...

Any person (other than individual or huf who is not liable to audit u/s 44AB) who is responsible for paying to a resident

Fees for professional services
Fees for technical services
Royalty
Any remuneration or fees or commission by whatever name called, other than those on which tax is deductible u/s 192 to a director of a company
Any sum referred u/s 28(va)

Rate of TDS – 10%. If the recipient of income doesn’t furnish his PAN to deductor then TDS is to be deducted @ 20%. No surcharge, education cess or SHEC shall be added to the mentioned rates.

Tax is to be deducted at the time of credit of such income to the account of the payee or at the time of payment whichever is earlier.

TDS not required to be deducted in following cases

If payment is made by an Individual or Huf exclusively for personal purposes, then tax is not required to be deducted.
Assessee can apply to assessing officer for no TDS or TDS at lower rate under Section 197.
No tax is required to be deducted where the amount of such sum or the aggregate of the amounts of such sums credited or paid or likely to be paid or credited during the financial year does not exceed

30,000 in case of fees for professional services or
30,000 in case of fees for technical services or
30,000 in case of royalty or
30,000 in case of sum referred u/s 28(va)

The amounts are calculated for each of the above categories separately.

Professional Services covered under section 194J

Professional services means services which are notified by the board under section 44AA and sports person, coaches and trainers, event manager, anchors, film artists.

Technical Services covered under section 194J

Technical services mean any consideration for rendering services of managerial, technical ,consultancy nature But does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head salaries.

CA Vap Patel (Practice) (1205 Points)
Replied 19 February 2016

No. TDS will not be applicable neither u/s 194J nor under 194C. Plz refer following URL

https://www.simpletaxindia.net/2016/02/tds-on-internet-mobile-telephone.H T M L?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+SimpletaxIndia+%28SIMPLE+TAX+INDIA%29#axzz40ci0essP

CA GOKUL RAJ R (Chartered Accountant) (151 Points)
Replied 20 February 2016

Section 194-J of the Income Tax Act, 1961 ['Act'] provides that any person (other than specified individual & HUF) responsible for paying any sum to a resident payee, being in the nature of 'royalty' is liable to deduct TDS at the rate of 10% of such sum.

'Royalty' for this purpose is defined under Explanation 2 to section 9(1)(vi) of the Act, to mean “the consideration….for

(i) the transfer of all or any rights (including the granting of a license) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property;

(ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property;

(iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property;

(iv) the imparting of any information concerning technical, industrial,commercial or scientific knowledge, experience or skill;

(iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB;

(v) the transfer of all or any rights (including the granting of a license) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films; or

(vi) the rendering of any services in connection with the activities referred to in sub-clauses (i) to (iv), (iva) and] (v).”

The Finance Act 2012 has amended the definition of ‘Royalties’ under Section 9 of the Act with retrospective effect from 1 June 1976. The following Explanations inter-alia are proposed to be inserted in this regard:

“Explanation 5 – For the removal of doubts, it is hereby clarified that the royalty includes and has always included consideration in respect of any right, property or information, whether or not-

(a) the possession or control of such right, property or information is with the payer;

(b) such right, property or information is used directly by the payer;

Explanation 6 – For the removal of doubts, it is hereby clarified that the expression “process” includes and shall be deemed to have always included transmission by satellite (including up-linking, amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology, whether or not such process is secret.”

On a cogent reading of definition of 'royalty' with the recently introduced amendments, it appears that the payment made to the telecom company for data transmission by leased line would fall within the definition of 'royalty' under section 9(1)(vi) of the Act and thus liable for TDS under section 194-J of the Act (subject to exemption threshold limit of Rs. 30,000 per annum as provided under the section).

Thus you may deduct TDS at the rate of 10% on such payment being made to Internet Provider.

Satheesan.V.K (Tax Practioner) (37 Points)
Replied 20 February 2016

I have received a notice from IT department to pay interest on late payment TDS of Rs.130/- for the Quarter Q3 F/Y 2015-16. I paid this on 11-02-2016 SBI Koyilandy. I wanted to know the following details:-

Whether I have to inform the payment details to IT department. If the answer is yes how will I could inform this?
Whether I have to add chalan to Traces website?

Humbly expect an immediate reply.

Raghavendra (Accountant) (53 Points)
Replied 20 February 2016

TDS is not deductible on services using technology -- telephone charges, Internet charges, cable TV, leased lines. Payments for use of standard facilities by the public at large in which some form of technical service is inherent are not covered under section 194J. It has also been held in the case of Skycell Communications Ltd. v. Deputy CIT[2001] 251 ITR 53 (Mad.)

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Raghavendra (Accountant) (53 Points)
Replied 20 February 2016

Dear, Satheesan.V.K

As per the latest development in the TRACES, the following types of corrections can also be done directly from the TRACES website:

1. PAN Correction
2. Challan Correction

3.Interest Payment

srikumar (audit staff) (1203 Points)
Replied 20 February 2016

Payment to mobile phones bill was deducted tds sec 194c. Not for 194j

srikumar (audit staff) (1203 Points)
Replied 20 February 2016

Payment to mobile phones bill was deducted tds sec 194c. Not for 194j

Arun Kumar (Auditor & Tax Practitioner) (168 Points)
Replied 24 February 2016

Dear Sir

Since the Mobile/Telephone/Broadband bill is Revenue in Nature. And the detailed explanation was obtained from the below link. https://www.simpletaxindia.net/2016/02/tds-on-internet-mobile-telephone.H T M L#axzz414Tqf4TA Kindly revert back if i am wrong.

Regards

Arun Kumar