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Tds on accounting charges

Pravind Kumar Shaw (Sr. Accountants) (27 Points)

21 August 2012  
Dear All,
 

A partnership firm is paying accounting charges of Rs. 1,62,000 p.a. to an individual for accounting work of the firm. He is an employee of the firm. He is  a B.Com graduate. Whether this payment is liable for TDS?


 18 Replies

venkatesh (Tax Consultant) (80 Points)
Replied 21 August 2012

Yes u should deduct the TDS as per 194J of Income Tax Act 1965

CA. Subhash Dangi (Chartered Accountant) (1784 Points)
Replied 21 August 2012

As employer and employee relationship exists in this case , TDS on salaries U/s 192 is applicable subject to Maximum limit.  

 

venkatesh (Tax Consultant) (80 Points)
Replied 21 August 2012

But the bill is raised in the name of firm as he specified in the query.

CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 21 August 2012

Originally posted by : CA. Subhash Dangi

As employer and employee relationship exists in this case , TDS on salaries U/s 192 is applicable subject to Maximum limit.  

 

 

AGREE.......AS IN QUESTION SAYING HE IS THE EMPLOYEE OF THE COMPANY

CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 21 August 2012

Since the payee is an employee, TDS is liable to be deducted U/S 192(It is immaterial whther the payment is made for accouting charges).

Also, as you have specified that the payee is an employee of the firm, it will be better to debit " Salaries" head instead of " Accounting Charges " head.

 

Hemant Kumar (Accounts Manager MBA (Fin) CMA*)   (6450 Points)
Replied 22 August 2012

There are clearelely mentioned that firm is paying accounting charges of Rs. 1,62,000 p.a. to an individual for accounting work of the firm. He is an employee of the firm

So TDS to be deducted under section 192. but paying amount is less than taxable income. So there is no need to deduct TDS on his salary.

Ravi Nallipogu (Student ) (128 Points)
Replied 22 August 2012

  Dear Pravind Kumar Shaw in the above case if there is an employer and employee relationship exist its covered under sec 192 (Salaries) subject to individual slab wise rates applicable as per relevant assessment year. If such relationship does not exist then it is covered under sec 194 c and firm is suppose to deduct 1% as TDS since he is an Individual. He is not a professional according to Professionals covered under Sec 194 J.

CA. NARAYAN BHANDARI (Manager-Accounts) (57 Points)
Replied 22 August 2012

Yes the question clearly says that employee and employer relation exist so TDS is to be done u/s 192. However, the question would have been replied with another answer which is TDS under section 194C , had employer and employee relation not exist. This is because for TDS under section 194J, there is a necessity of having Professionl or Technical service, For that only specified profession is announced like CA, CS, Doctors etc. B.Com graduate does not fall under the above category.

U S Sharma (glidor@gmail.com) (21031 Points)
Replied 22 August 2012

as being the full time employed at the establishment, he is not allowed to do any type of business or profession in individual capacity. its against the laws and confirms intercompitance with employer. 

 

 

Manoj Chawla (ACCOUNTANT) (128 Points)
Replied 22 August 2012

NO deduct of tds bcuse bcom graduarted are not qualified for given professional servies.

one think company just pay him salay & that cause amt is less then taxable income .....not need of tds deduction 

ACS Gaurav Jain (company secretary) (551 Points)
Replied 22 August 2012

If his total income including salary, accounting charges and any other income is excess by maximum limit than deduct tds in section 192B.

CA Saiyum khan (Practicing CA) (685 Points)
Replied 24 August 2012

Originally posted by : CA. NARAYAN BHANDARI
Yes the question clearly says that employee and employer relation exist so TDS is to be done u/s 192.

However, the question would have been replied with another answer which is TDS under section 194C , had employer and employee relation not exist.

This is because for TDS under section 194J, there is a necessity of having Professionl or Technical service, For that only specified profession is announced like CA, CS, Doctors etc. B.Com graduate does not fall under the above category.
 

Having professional and technical skill is not the monopoly of CA, CS or Doctors. If B. Com graduate is competent enough to give the accounting services to the client then he fall in the category of professional services as per sectin 194 J. As the accounting skill does fall under that category....

CA. NARAYAN BHANDARI (Manager-Accounts) (57 Points)
Replied 24 August 2012

I AM REFERING TO SECTION 44AA & 44AB OF INCOME TAX ACT WHICH DEFINES THE PROFESSION. AS PER THAT SECTION THAT ARE SPECIFIED CATEGORY WHICH FALL UNDER PROFESSIONAL SERVICE. SO OTHER THAN THAT ARE COVERED BY 194C

AASHA (ACCOUNTS OFFICER) (362 Points)
Replied 25 August 2012

As employer employee relationship exists so TDS provisions as per SEction 192

are applicable that is TDS on salaries but here amount paid is below exemption

limit so no TDS is required to be deducted

 


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