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Tds on recruitment charges

CA jayalakshmi (Associate consultant) (235 Points)

25 February 2009

under which section 194c or 194j ,tds on recruitment charges will be deducted.

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18 Replies

DIPAK AGARWAL (Service) (554 Points)
Replied 25 February 2009

Originally posted by :jayalakshmi
"	under which section 194c or 194j ,tds on recruitment charges will be deducted.	"

It should be deducted u.s.194C @ 2% + S.Charge+ e.cess as applicable

CA CS VINAYAK PATIL (CHARTERED ACCOUNTANT) (921 Points)
Replied 25 February 2009

Originally posted by :jayalakshmi
"	under which section 194c or 194j ,tds on recruitment charges will be deducted.	"

Recruitment charges will be u/s 194j because it is u r skill

DIPAK AGARWAL (Service) (554 Points)
Replied 25 February 2009

Originally posted by :.VIN @ Y @ K..
"	Originally posted by :jayalakshmi " under which section 194c or 194j ,tds on recruitment charges will be deducted. " Recruitment charges will be u/s 194j because it is u r skill	"

no its come under contracts

shrinath (CS Final and CA Fina) (65 Points)
Replied 25 February 2009

recruitement charges will be come under profession charges.

Abhinav Agarwal (M.Com C.A SAP Consultant) (814 Points)
Replied 25 February 2009

We enter into a contract with the recruitmrnt firms that we will hire through there firm against which they will charge some fee on the basis of %age of CTC.

There firms are just providing service as a mediators and not adding any value to the businedd process or the company. They work generally over phone.

In my opinion, it comes under 194C.

(Guest)

Yes, It will fall Under 194 C. It is clearly a contract between employer and the employment agency. No professional services rendered by the consultancy firm

>> Rajesh

Madhavendra (CA Final Student) (99 Points)
Replied 27 February 2009

Fee for technical Services means any consideration for rendering of any managerial, Technical or consultancy services. The recruitment agency essentially are consultans who render service in a professional manner and just because there is a contract between a company and a consultant it cannot come under 194C. So i think it should be 194 j.

Jagdish Bhalia (Practicing CA) (453 Points)
Replied 02 March 2009

There is a contract between the company and recruitment agency therefore provision of section 194(c) will apply.

Dhananjaya.N (Asst. Manager Finance & Accounts) (57 Points)
Replied 02 March 2009

If you have contract in that agency it will be in 194 C(Contracts), otherwise it will be in 194 j TDS on Professional

1 Like

Prateek (Audit executive) (22 Points)
Replied 31 March 2010

Payments to recruitment agencies are in the nature of payments for services rendered, and hence will be subject to TDS under section 194J of the Act, and not under section 194C of the Act.

Circular : No. 715, dated 8-8-1995

Gaurav Pathak (Designated Partner) (21 Points)
Replied 08 June 2015

Most people are confused and don't have logical explanation for tds rate for Recruitment.

TDS rate for Placement agency is 2% according to Section 194c.

First of all we must understand what is professional service.

A professional service is a service provided by engineer, doctor, lawyer or Charted Accountant because they use their skills and professional qulaification for the service.

Recruitment is a contract based wok. A placement agent doesn't need any professional degree to supply manpower. His work is entirely based on available data for required manpower. if he doesn't have the data of candidates, he certainly can't provide mapower even if he enters the contract. whereas a doctor, CA, engineer or lawyers, they work based on their study and qualification.

An engineer can't do doctor's work or CA's. But all of them, if they wish, can do placement agent's work.

I hope now the confusion is clear.

vishnu Arrawatia (Asst. manager) (24 Points)
Replied 16 October 2016

Payments to recruitment agencies are in the nature of payments for services rendered, and hence will be subject to TDS under section 194J of the Act, and not under section 194C of the Act.

Siliguri Security Services (6 Points)
Replied 15 March 2017

Dear Sir,

We are having a Security Service Provider Company & supply Security manpowers to the various clients.

One of our XYZ client deduct TDS from Total Manpower + S Tax Billing. i.e. if, suppose contract Amount is Rs.5000/- and Service Tax is 15%. The Total Bill amount is Rs.5750.00/-.

Client deduct upon TDS @ 2% on total BIll (Rs.5750.00/- X 2%) =Rs.115/-.

But, our local CA said that. the TDS deduction rule is to Rs.5000/- x @ 2% = 100/- is TDS Amount

Please help me out to short out the problems.

Warm Regards

Narayan Biswas

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