Tds query

Page no : 2

Shaan Bhasin (Working Professional) (97 Points)
Replied 11 December 2011

It would depend upon type of employee if it is for providing labour then it would fall under 194C otherwise it would be under section 194J.

j.r.kota (proprietor) (78 Points)
Replied 12 December 2011

As per the department circular 715 dt 08.08.1995, it falls under Sec 194J. It is a professional acativity.

Usually a consultant is one who gains indepth knowledge and experirnce and expetrise, not normally associated with ordinary people and, is generally called a professional. You can also refer the dictionary meaning of professional and consultant. The ICAI also has defined who is a professional and what are all his responsibilities under the respective associtions to which he belongs to.

When you say he is consultant, one can safely assume that he is different from a normal person and falls under the category of a professional .

A wtirren contact is nothing but an understanding reached between the parties for clarity. It cannot by itself alter the position drastically. At the most it would be a circumstantial evidence of an action. Suppose you draw a diagram of horse and write an article on horse. But you caption it as ass. What this article would be? Is it on horse or ass?

The golden rule when it comes to TDS deduction is - in case of doubt deduct and remit to the department. After all the deductor is not loosing any thing.The deductee can get back the same from the Dept in due course of time. It is always better to err on the positive side instead of inviting penalty, interst and prosecution notices from the dept.

Jrk.