TDS and GST ITC on Membership fees to club

To determine if TDS (Tax Deducted at Source) is required on membership fees paid to a club for employee recreation and if ITC (Input Tax Credit) can be claimed:

TDS Applicability As per the Income Tax Act, 1961:

1. _No TDS on membership fees_: TDS is not applicable on membership fees paid to a club for employee recreation, as it is not considered a payment for a "work" or "service" under Section 194J. ITC

Eligibility As per the GST Act: 1. _ITC not eligible_: ITC is not eligible on membership fees paid to a club for employee recreation, as it is considered a "personal use" expense and not a "business use" expense under Section 17(5) of the CGST Act.

 However, there's an exception: 1. _If membership is for business purposes_: If the membership is primarily for business purposes, such as entertaining clients or promoting business relationships, ITC might be eligible.

To illustrate: - _Membership fees_: ₹50,000 per annum - _TDS applicability_: No TDS required - _ITC eligibility_: ITC not eligible (unless membership is for business 

A COMPANY IS PAYING MEMBERSHIP FEESVL TO CLUB. 

TDS IS NOT APPLICABLE.

BUT IF TDS IS DEDUCTED BY DRFAULT, IT MUST HE DEPOSITED.

TDS on club membership fees: Section 194J applies to fees for professional or technical services. Membership fees to a club are not a payment for a service rendered to you ,  they are a subscripttion. So TDS under Section 194J does NOT apply on club membership fee payments.

GST ITC on membership fees: This is where it gets restrictive. Section 17(5)(b) blocks ITC on the following:
- Membership of a club, health and fitness centre
- Accommodation, food and beverages (unless specifically for resale or in the business of providing such services)

So if your company is paying a club membership for employees, GST ITC on that input is blocked. No credit can be claimed even if a valid GST invoice is received.

Exceptions exist only if you are in the business of providing such club or hospitality services yourself (e.g. a hotel or club operator).

For the full list of blocked ITC categories and any workarounds, this [TDS compliance guide](taxgarden.in/blog/tds-filing-services-india-forms-due-dates-penalties-2026) covers TDS section-wise applicability with practical examples.