Tds on 194c

Deduct tds u/s 194j as tds on technical charges @ 10%.

Hi, 

In your case, I think it would be better to address the service provider as a 'Package Tour Operator' rather than a travel agent. My views are as follows:

1. TDS to be made u/s 194-C: 

This is a composite transaction and TDS shall be made @ 1% or 2% as the case may be.

2. What is the amount on which TDS should be made?

The entire amount of invoice shall be subject to TDS u/s 194C at the rate as applicable.

However, if the tour operator were to issue an additional separate invoice for recovering the actual expenditure incurred by it on Hotel booking, Cab charges, etc (and accompanied by the respective 3rd party bills), then such additional invoice may not be subject to TDS since it takes the nature of reimbursement of expense. 

Hence if a consolidated bill is issued, TDS should be made on total amount charged.

[The fact that the operator has charged only Rs. 1000 as service charge is NOT RELEVANT unless it could be proved that the profit of tour operator was restricted to Rs. 1000, which is highly unlikely]