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Tds deduction rate for security guard agency

S K Biswas (Manager) (25 Points)

09 September 2016

I Want to know the rate of TDS deduction by one of my client. I have a Private Security Agency

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Gourav Gupta (Working in CA Firm) (671 Points)
Replied 09 September 2016

1% or 2% Ind or huf and other than Ind or huf

S K Biswas (Manager) (25 Points)
Replied 09 September 2016

Dear Gaurav,

I am from a security agency. A CA firm in Kolkata advise one of my Client for deduction 10% TDS on billing amount appx Rs 30000/- pm. (Rule 194J). Now what can I do against the CA ?

ANKUR TAH (Teacher Consultant and CA finalist.) (543 Points)
Replied 10 September 2016

Security service is covered under contract u/s.194C need to be deducted 1% for Individual & 2% for companies

CA.Vinita Gupta (Deputy Manager- Finance) (2918 Points)
Replied 10 September 2016

Make a contract with the agency and deduct 2 or 1 % as per the status of the assessee

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 10 September 2016

Correct section for deduction of tds in your case is 194C and not 194J, deduct tds @ 1% or 2% as per the status of assessee.
Contract for carrying out any work includes service contract. Provision of security service is a service contract and covered under 194C.
If you see the provisions of section 194J of the Income Tax Act, 1961, you would find that all the services mentioned therein are in the nature of personal skill or experties. Deploying security agency guard are nothing to do with specialized personal skill or exprerties. Therefore the same is no covered by the provisions of section 194J. Moreover, you need to see that whether your activity is falling under section 44AA of the income tax act, 1961. The answer is obviously no and therefore you need to deduct TDS under section 194C only.

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PRAVIN VADNERE (AUDITOR) (115 Points)
Replied 10 September 2016

If i received following bill
security salary + Service charges+ pf employer contribution + esic employer contribution = gross bill amount
in this case in which amount we should deducted Tds

CA.Vinita Gupta (Deputy Manager- Finance) (2918 Points)
Replied 11 September 2016

The Security agency should pay the PF and the ESI. Are you depositing the PF and ESI ???

Manish mundai (delhi) (65 Points)
Replied 12 September 2016

Security Service includes contract and hence 194C is applicable, not 194J. The rate should be 1% for Ind/HuF and 2% for "Other than Ind/HUF. Also, the limit is Rs.30,000 in single payment or Rs. 70,000 in aggregate during the year, there is no monthly concept in this.
Let me know if ur query is still unsolved !!

Amit Kanunga (Article Assistant and Post Gradute) (644 Points)
Replied 30 November 2016

Rate of TDS

S. No	Nature of Payment	TDS Rate if PAN available	TDS Rate if PAN not available
1	Payment / Credit to resident individual or HUF	1%	20%
2	Payment/Credit to any resident person other than individual / HUF	2%	20%
3	Payment/ credit to Transporters	NIL	20%

Note:- No Surcharge, Education Cess and SHEC shall be added. Hence, TDS shall be deductible at basic rates.

Amit Kanunga (Article Assistant and Post Gradute) (644 Points)
Replied 30 November 2016

Rate of TDS

S. No	Nature of Payment	TDS Rate if PAN available	TDS Rate if PAN not available
1	Payment / Credit to resident individual or HUF	1%	20%
2	Payment/Credit to any resident person other than individual / HUF	2%	20%
3	Payment/ credit to Transporters	NIL	20%