Tds for online marketing services

I have this question that has killed my brains since this evening and I can't think no more. Would really appreciate correct advise please.

A & Co. operating and registered in India is providing B & Co. operating and registered in India, online marketing services using tools such as Google Adwords, Facebook & LinkedIn Ads. and Social Media Marketing. They are also charging a fee for online consulting.

I’d like to know the tds procedure to be followed for the same.

I do understand that the Consulting Fees attracts TDS at 10% under section 194J. But I am unable to understand the tax implication for the Google & Facebook Ads.

I highly appreciate any answers. 

Replies (5)
Quick Summary
TDS on online marketing depends on nature of service. Consulting fees attract 10 percent under 194J. Ad services like Google or Facebook may fall under 194C at 2 percent if treated as contract, or 194J if technical.

The online marketing services can be defined either as contratual services or as technical services depending on the actual nature of services rendered by the service provided. for eg if the services require extensive scriptting, programming etc, then we may have to classify as techincal services, in which case TDS would be 10%. If it is merely creating visibility  with google adwords, oher search engines etc, then it can be a contract in which case the TDS will be 2%

what if influencer is doing unboxing activity on you tube for our product.  I understand its a professional service.  Please help

Tds depends upon nature of advertising contract done. If it is a contract done like for yearly , quaterly , for 2 advertisements, 3 advertisements etc than tds will be deducted under section 194c. ... Under 194j if payment made in a financial year to same person is less than 30000 rs than no need to deduct tds.

 

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Current position for an Indian digital-marketing agency:

• Ad campaign execution (Google/Meta ads management, display or social ad buying, content production for ads): Sec 194C at 1%/2%, since "work" includes advertising.

• Strategy, SEO consultancy or digital audits (advisory nature): Sec 194J(b) at 10% professional, or 194J(a) at 2% if purely technical, e.g. platform or website technical services.

• Influencer content (YouTube unboxing etc.):

– cash fee: 194J (professional; content creators are often treated as professional) or 194C if treated as advertisement production

– free products to the influencer above Rs 20,000 a year: 194R at 10% (CBDT Circular 12/2022, Q&A on social media influencers).

• Foreign platforms (Google Ireland or Meta) billed directly: no TDS under Sec 195. Equalisation Levy (6%) was abolished from 1 April 2025. IGST under RCM applies if billed by a foreign entity.

• Thresholds: 194C Rs 30,000 per bill or Rs 1 lakh a year; 194J Rs 50,000 a year. From 1 April 2026: Sec 393 of the Income-tax Act, 2025.

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