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TDS on AMC

Ajay Puri (AD(M)) (69 Points)

18 August 2009

At what rate and under which Section the TDS is to be deducted on Annual Maintenance Contract of Computers and Peripherals? If possible, kindly provide a copy of Govt order/circular/notification in this regard.

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8 Replies

CA Kingsley (Audit Manager) (470 Points)
Replied 18 August 2009

In my opinion, computer AMC shall be liable for TDS only u/s 194J because, it requires special knowledge - software & hardware. I didnt find any circular or notification specifically for AMC. The circular no 715 states that payments made to electrician and to others for ROUTINE NORMAL MAINTENANCE contracts will require TDS u/s 194C. It also says that Maintenance contracts involving rendering of technical services will require deduction of tax u/s 194J. I am sure, IT Department will take a stand that computer maintenance will fall under technical service category and not under routine normal maintenance. So I suggest you to deduct u/s 194J.

RITESH KOTHARI (B.COM, FCA, DISA(ICAI)) (778 Points)
Replied 20 August 2009

YES TDS TO BE DEDUCTED U/S 194J

llllVICTORllll (Internal Auditor) (511 Points)
Replied 20 August 2009

yup 194J

Krutesh Patel (ACA) (727 Points)
Replied 20 August 2009

No, Annual maintenance contract will be liable for TDS u/s 194C.

N.Naveena Maheswara Rao (Assistant manager for accounts) (1096 Points)
Replied 21 August 2009

AMC will be liable u/s 194c.

RITESH KOTHARI (B.COM, FCA, DISA(ICAI)) (778 Points)
Replied 21 August 2009

CAN ANYONE EXPLAIN WHY U/S 194C?

COZ I AM SURE OF IT THAT IT IS U/S 194J.

CA CHINTAN AJMERA (Chartered Accountant) (2987 Points)
Replied 21 August 2009

Because AMC is one type of Contract

Ranjeet Singh (Senior Manager -Finance (North Region)) (22 Points)
Replied 23 January 2012

The Annual Maintenance Contracts is also known as AMC which is liable to TDS as per the Income Tax Act 1961. It was issued by the Central Board of Direct Taxes (CBDT) on the Circula No 715 and was being published on 8th of August 1995.

As per the circular,

"Routine, normal maintenance contracts which includes supply of spares will be covered under section 194C. However, where technical services are rendered, the provision of section 194J will apply in regard to tax deduction at source."