TDS ON TRAINING EXPENSES

Dear Dinesh

1st make it cleared that you dont have made any  contract with that company, if you have made it then you have to deducted the TDS u/s 194C,

& if it is not then you shoukd Deducted it u/s 194J (i.e professional fees)

Weather u have contract with the party or not is not material. By contract, nature of expenses and TDS is not changed. TDS is to be charged accoridng to its nature of payment.

194C.....

Dinesh, 194 J provide the list of professional which includes CA, CS, Architect etc.

Computer professionals are not included in this list and therby will be covered in 194C.

Regards

Piyush

The word ‘profession’ has been interpreted in the context of S. 28 of the Act. In CIT v. Manmohan Das, (1996) 59 ITR 699 (SC), it was held by the Supreme Court that the expression ‘profession’ involves the idea of an occupation requiring either purely intellectual skill or if any manual skill, as in painting and sculpture, or surgery, skill controlled by intellectual skill of the operator, as distinguished from an occupation which is substantially the production, or sale, or arrangements for the production and sale of commodities. In another decision of the Apex Court in Indian Medical Association v. V. P. Shantha, AIR 1996 SC 550, it was held that one of the characteristics of a profession is that the nature of work is skilled and specialised and a substantial part is mental rather than manual. In CIT v. International Clearing and Shipping Agency, (2000) 241 ITR 172 (Mad.), the High Court held that the distinguishing feature of a profession is the possession by the practitioner of specialised knowledge involving intellectual skill and higher education in learning. The services rendered by the professional while practising the profession, are the services for which he has been trained. The practice of profession cannot be regarded as a commercial activity though the practice is not without compensation or profit. The compensation earned by the practitioner of professional is by reason of the personal qualification possessed by him or her. Thus, a person can be said to be providing professional services where he possesses the intellectual skill necessary for rendering the services and in which he is professionally trained. Further, the services are more mental than manual

Person who is giving training of a particular software need a special skill which covered under professinal service. Contract is something different. On the other hand, a ‘contractor’ is generally understood as person who undertakes a contract to provide materials or labour for a job but not skill or application of mind

SAP training will be conducted by  professional consultant  like CA,  IT technicals and comes under professional service, Therefore TDS will be

deducted  under section 194J (Tds on professional services  at the rate 10 %)

TDS to be deducted under 194 J........... Cheeeeeeeeeeers...............