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Tds on telephone bills

SANJAY MAHESHWARI ACA ACS (Chartered Accountant) (123 Points)

08 December 2011

Please, clarify whether TDS is required to be deducted on Telephone Bills, Internet Bills and other related bills paid to non-government companies like Airtel, Tata Docomo,etc

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13 Replies

satish kumar voleti (A.C.A., (ICWAI)) (1686 Points)
Replied 08 December 2011

TDS is not required to be made on telephone bills or internet bills as they do not fall under the technical services as it does not have any human involvement , pronounced in the recent judgement.

so do not worry.... you need not to pay TDS on those telephone bills...

Brajesh gautam (student) (232 Points)
Replied 08 December 2011

SINCE WHEN IT WAS APPLIED, AND BEFORE THIS AT WHAT PERCENTAGE WAS APPLICABLE ON TELLEPHONE & INTERNET BILL

SANJAY MAHESHWARI ACA ACS (Chartered Accountant) (123 Points)
Replied 09 December 2011

not clear, provide more discussion.

Chetan (Senior Auditor) (172 Points)
Replied 09 December 2011

These are only services and we have to pay service tax on these so TDS should not be deducted as these are the services and TDS is deducted on work done by using man force.

satish kumar voleti (A.C.A., (ICWAI)) (1686 Points)
Replied 09 December 2011

TDS is not deductible on services using technology -- telephone charges, Internet charges, cable TV, leased lines. Payments for use of standard facilities by the public at large in which some form of technical service is inherent are not covered under section 194J. It has also been held in the case of Skycell Communications Ltd. v. Deputy CIT[2001] 251 ITR 53 (Mad.). as the per judgement only services involving the human element are considered as technical services for the purpose of section 194J, hence no tds for the telephone internet services rendered.

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CA Chirag Haraniya (Chartered Accountant) (902 Points)
Replied 09 December 2011

Agree with Satish Kumar...

(Guest)

Originally posted by : satish kumar
	TDS is not deductible on services using technology -- telephone charges, Internet charges, cable TV, leased lines. Payments for use of standard facilities by the public at large in which some form of technical service is inherent are not covered under section 194J. It has also been held in the case of Skycell Communications Ltd. v. Deputy CIT[2001] 251 ITR 53 (Mad.). as the per judgement only services involving the human element are considered as technical services for the purpose of section 194J, hence no tds for the telephone internet services rendered.

well explained .

Thank you

CA PRAVEEN SINGH (MANAGER ACCOUNTS) (2277 Points)
Replied 10 December 2011

RIGHT....

CA Maulik Rachh (-) (114 Points)
Replied 13 December 2011

follow Skycell Communications Ltd. v. Deputy CIT[2001] 251 ITR 53 (Mad.) decision,so TDS is not deductible..

Tony John (Chartered Accountant) (6085 Points)
Replied 13 December 2011

Agree with Satish Kumar sir. . . .

vicky0009 (student) (24 Points)
Replied 05 August 2015

from my opinion tds should be deducted on telephone & internet bills.

because as per section 9(1)(vi) royalty is defined. And as per the explanation 2 to this section defination of royalty is defined which says:

Explanation 2.—For the purposes of this clause, "royalty" means consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head "Capital gains") for—

(i) the transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property ;

(ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property ;

(iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property ;

(iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill ;

10[(iva) the use or right to use any industrial, commercial or scientific equipment10a but not including the amounts referred to in section 44BB;]

(v) the transfer of all or any rights (including the granting of a licence) in respect of10a any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films ; or

(vi) the rendering of any services in connection with the activities referred to in sub-clauses (i) to 10[(iv), (iva) and] (v).

please note the point 3

then read explanation 6 to same section which says:

Explanation 6.—For the removal of doubts, it is hereby clarified that the expression "process" includes and shall be deemed to have always included transmission by satellite (including up-linking, amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology, whether or not such process is secret;]

then please link point 3 with explanation 6.

thus from my view tds should be deducted u/s 194j.

we need more discussion for the same please reply

vicky0009 (student) (24 Points)
Replied 05 August 2015

further adding some facts.

trasmission by sattelite is done by telephone company.

and we are using the same. In other words i am using the process.

because in telephonic conversation when we make call some other personal signal from our phone uplinked to satellite by telephone company & that signal is downlinked by telephone company to person to whom call is made.

thus all the process of uplinking & downlinking is done by telephone company.

and i am using the same.

thus tds to be deducted u/s 194j @ 10%