Tds for business to business transaction

1564 views

Save Share

Ashish Soni

Founder-CEO

21 Points Posted on 06 October 2015

I run an IT services business and I am required to hire third party services. I would like to inquire regarding the TDS liability we have when we make payment to third party services company against their services.

The total annual payment we have to make to this company is less than 240000 INR. Also, I would like to inquire regarding the TDS liability we have when we make payment to this company as a rent for using their computer/telephones etc.

Replies (2)

Karthik.V.Kulkarni

Chartered Accountant

766 Points Posted on 06 October 2015

Hi,

If the services received by the company are technical in nature you have to deduct tds @ 10% u/s 19J.

Tds on rent is deductible if rent payment to a company exceeds 180000 @ 2%

Regards

Karthik V Kulkarni

Shivani Mittal

Practice

323 Points Posted on 06 October 2015

Dear Ashish,

TDS will be deducted @ 2% u/s 194-I. Liability for deduction & payment of TDS arises in all cases except where assesee is an individual or HUF who is not liable to tax audit u/s 44AB during the preceeding financial year.

Hence, in case you work in your own name i.e individual capacity and did not have tax audit during preceeding financial year i.e financial year preceeding the current financial year , liability for TDS would not arise.

Regards

CA Shivani Mittal

Shivani & Associates

cashivani.associates @ gmail.com