TDS ON SPONSORSHIP OAUMENT TO TRUST

The agreement of sponsorship is, in essence, an agreement for carrying out a work of advertisement. Therefore, provisions of section 194C shall apply.

Circular : No. 5/2002, dated 30-7-2002.

TDS @ 1% where payee is individual/HUF and 2% for other payees

No TDS where single contract < 30,000

TDS deductible where single payment < 30,000 but FY aggregate > 1,00,000

1. As explained by expert above TDS u/s 194C @ 2% or 1% depending upon the nature of the payee. 
2. The only other way that it could be categorized is TDS u/s 194J which is for profession and sponsorship services cannot be considered as a profession, unlike advertisement services. 
3. Circular: No. 715, dated 08-08-1995 supports this view. 
4. TDS u/s 194C is to be deducted @ 2% in case of the corporate payee or else 1% on the amount paid to the sponsorship agency. 
Please correct me if the above solution has an alternative view.