Tds deduction on call center services

Hello Amit,

As per my understanding and experience of BPO industry, you take contracts of say 100 seats at say 25000 per seat. Your job is to generate leads for your clients. This kind of arrangement is nothing but a Contract which will fall under section 194C only.

As per your client's contention that Information Technnology Services falls under 194J. Prima facie call center services is not IT service. Therefore it will fall under section 194C and not 194J

 

Regards    

Hello We are not into lead generation but support the product of our client by helping clients resolve their queries. I also read the whole section 194J. I could not find information technology anywhere mentioned in the section. I just found technical services given and our client says that since we are solving their products technical questions for their customers and hence it is a deduction under 194J.

Your services are liable to be taxed @ 10% and not 2% in terms of the nature of service you are providing. If you are providng a service which an ordinary man cannot and there is exercise of skill and knowledge it will attract 10% deduction.

If you are short of cash due to 10% deduction instead of 2% you may apply to Department for a no deduction or lower deduction certificate under section 197 and pay at your slab rate when you file your return.

Thanks,

i agree with Dipjyoti TDS rate applicable in your case is 10% u/s 194 J.

 

if TDS amount is heavy then go for lower rate of TDS u/s 197

I have seen a chennai high court ruling which says “Technical service” referred in section 9(1)(vii) contemplates rendering of a “service” to the payer of the fee. Mere collection of a “fee” for use of a standard facility provides to all those willing to pay for it does not amount to the fee having been received for technical services. Here I am not offering technical service to the payer of my bills but to their customers .