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TDS on Accounting Charges

Chintan (Student) (29 Points)

12 May 2010

Hey freinds can any one tell

Under what section tds for accounting work done will be deducted?

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9 Replies

Rachit (Analyst) (913 Points)
Replied 12 May 2010

If Accounting charges are paid to a professional person (eg CA, MBA., etc...) TDS will be deductible u/s.194J.

To others one can consider sec.194C

4 Like

CA Shiv (Business Controller) (2987 Points)
Replied 12 May 2010

194 J.. agree to rachit

1 Like

Sanjay Singh Rana (CA) (208 Points)
Replied 12 May 2010

194J (applicable on Fees for professional or technical services)....... will apply in case service provided by professional

rachit is right :)

1 Like

Amir (Learner) (4016 Points)
Replied 12 May 2010

Dear Chintan,

Agree with above friends....

Just want to add if payee is an employee (like an accountant & not a consultant) then TDS will be deducted u/s 192.

2 Like

CMA Arif Farooqui (Cost Accountant) (4798 Points)
Replied 13 May 2010

if services of a professional, then 194 J otherwise 194 C

nims nogia (article) (21 Points)
Replied 05 March 2016

I dont agree with rachit. Sec 194c is for works contract or labour contract and accounting is niether a works nor a labour contact. My view on this issue

1. For employees : 192 is applicable specifically, you are not a employee so NO TDS
2. For Professional : TDS is attracted , for professional consultancy 194J is applicable. 194J says that services rendered in the course of carrying on professional consultancy for accountancy are liable for TDS. therefore nomenclature will not be important for this purpose and TDS will be applicable.

Moreover Section 194J read with 44AA- Specified Profession does not name for any specific qualification for accountancy. e.g. company secretary is an example in the section 44AA BUT Chartered accountant is not an example therein hence it may be interpreted that nomenclature is not important

Furthur Sec 194j specifies accountancy as a profession.

SANAJAY KAPOOR (cwa) (45 Points)
Replied 05 March 2016

UNDER SECTION 194J.

Vivek Suthar (Accountant) (31 Points)
Replied 06 May 2019

suppose a person working in proprietary firm where everyone's payment made as labour contract charges and TDS Deducted in 194C, while person doing accounting work don't want that be paid as a labour contractor as TDS attract in 194C and he have to file ITR by showing a contract business.

if he will paid as accounting charges then tds would be attract or not as he getting Rs.45000/per Month , Total Rs.5.50lac year , now in return he can show 50% as a income Rs.2.75 Lac - as per New income tax rule Tax in NIL up to Income of Rs.5.50Lacs

please advice whether TDS is attract or Not

Harshil Shah (2 Points)
Replied 21 February 2020

In the judgment of Nikhil Chandra Mitra V/S CIT(A)-15 Kolkata, the Income Tax Appellate Tribunal (ITAT) Kolkata bench has held that the payment of accounting charges or fee to a person who is not a qualified professional cannot be made subject to tax deduction at source under section 194J of the Income Tax Act.