TDS on Penalty

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I wish to know whether there is any liablilty on part of payer to deduct TDS under section 194 c towards Penalty charges levied by travel agent for cancelling the original ticket. Please advise 

Replies (1)

Dear Narayan,

Generally TDS is not applicable on payments made to travel agents pursuant to the Board's Circular No. 713

But in case payment are subjected to TDS,  then I think it will be deducted on Penalty amount since the term used is "any sum pursuant to a contract"

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