TDS on consultancy fees paid to Engineering college

OPINION ON  01:

If income of deductor is exempt , it does not reduce its liability to deduct tax on payment covered by sec 192 to sec 195. since they are deducting tax on income of payee & it has nothing to do with exemption status of payer

OPINION ON 02 :

Ask the payee to give app to AO in form 13 to receive "certificate for no deduction or lower deduction" & follow the certification power

IT WILL NOT MAKE ANY DIFFERENCE IF PAYER IS govt. college or private college as explained in 1 above

Hi

Thanks for the reply but you have replied in wrong way. Here the deductor is Compnay and not the college.

Hi Sujit

"Certificate for no deduction or lower deduction"

Should be collected by the collage & have to submit with the company so company will not deduct TDS on the same Invoice (i.e. Consultancy)

Dear Subhas,

You have only mentioned about the TDS Certificate u/s 197, it means that  the company is liable to deduct tax . (If yes,.... clause of my query) If so, then what about the provision of sec 10 which exempt income of College/Uniersity? If college income is exempt, should we deduct tax? What about if its a govt college, as because if the payee is govt., there is no need to deduct tax. Please highlight these issues also.

see sec 196

I THINK TDS SHOULD BE DEDUCTED U/S 194 J AS PER I. TAX ACT 1961, IF CERTIFICATE U/S 197 NOT PROVIDED. THE ANOTHER THING IS EXEMPTION UNDER SEC. 10, COLLEGE MAY APPLY THIS INCOME AS EXEMPTION AND GET HIS TDS REFUND FROM INCOME TAX AUTHORITY.