tds

Follow Ankur sir comment.

Hi Manali,

As per section 194C, in case of contracts, the TDS needs to be deducted on the full bill amount. You can not bifurcate the material & labour.

TDS is to be deducted only on labour part and not materials. as TDS is deducted on services and not goods supplied.

Hi Khushboo,

I would like to draw your kind attention towards proviso to Section 309(1) which reads as follows:

“Provided that any remuneration for services rendered by any such director in any other capacity shall not be so included if –

                        (a)        the services rendered are of a professional nature, and

                        (b)        in the opinion of the Central Government, the director possesses the requisite qualifications for the practice of, the profession]. “

Thus on the basis of above provision and in your case such payment as royalty shall not be treated as remuneration to director if and only if such the 2 conditions mentioned above fulfill simultaneously.

In proviso to Section 309(1) above you have to file application to CG in order to obtain CG approval.

Best Regards

Hi khusboo,

plz ignore my previous comment, I have check proviso of Section 309(1). Mr. Ankur is absolutely correct. Follow as he mentioned.

But Ankur Sir i dont think possessing patent right is any professional qualification........so does this section still applies

Hi Khushboo,

Ankur Sir is correct. It depends on the facts of the case such as if the director is professionally qualified to posses such patent, ie. he has phd. degree or sicentist or whatever may be the case, then sec 309 shall apply but incase if he ordinarilly gets possession of it then sec 309 shall not apply. So we need to look at the circumstances.

Hi khushboo,

I totally agree with your point of view, there is no need of any kind of CG approval or Expression of Opinion under Section 309(1) of the Companies Act as it is completely a different transaction which doesn't attract provisions of Section 309 of the ACT.