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TDS- Query

santhosh (CA) (636 Points)

18 September 2009

HI ALL

M/s XYZ Ltd engaged an Ad Agency (L) for Developing their Company Advertisement. L inturn referred a Film Producer M/s ABC to Produce/Direct/edit the film for the co ad.

Now payment is made by the XYZ to ABC for their service. It is Requested in invoice of ABC to deduct tax at source U/s 194C. But the internal auditors insist on deducting tax u/s 194J. Pls Guide me which section is applicable for Deducting Tax at Source.

Thanks

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18 Replies

Arti (Jr Manager) (123 Points)
Replied 18 September 2009

Under Sec 194 C TDS should be deducted if there is a contract between them.

Contract for work includes advertising and telecasting including production of programmes for such broadcasting.

When an advertising agency makes payment to Models, artists photographers etc who comes under Profession then TDS should be deducted under Sec 194J.

Vivek Jarial (Student) (272 Points)
Replied 18 September 2009

if the advertising company give u techinical or professional service than tds is liable u/s 194J

CA Adarsh (Job) (82 Points)
Replied 18 September 2009

if a person with whom the contract enterred applied his knowledge & technical experties for that contract then TDS will b Deducted U/S 194J and if there is a use of labour or manpower then TDS will be Deducted U/S 194C. in URS case TDS will be deducted @ 11.30%

santhosh (CA) (636 Points)
Replied 18 September 2009

Thanks for the reply But Still i am not Clear with your answers!

Arti (Jr Manager) (123 Points)
Replied 18 September 2009

Good ,not understanding that. We should take such decisions for our clients which is most benefical to them. Here 194C is most beneficial, so ask ur client to create an agremment and deduct TDS 194 C. we can do anything.

CA Adarsh (Job) (82 Points)
Replied 18 September 2009

hold on Miss Arti how can we do anything mam As per TDS Rules here TDS will be Deducted @ 11.30%

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 18 September 2009

Santosh

Under which section TDS shuld be deducted depends on the nomenclature of contarct terms. As you told that ABC done the editing/directing the film then , nomenclature says that it is the professional & technical job. So you must deduct the TDS u/s 194J ie. 10% No suurchage & no cess.

Hope you must have clear view...

santhosh (CA) (636 Points)
Replied 18 September 2009

Thanks Mr. Sorabh . Its clear now I also have your view only.

Vivek Jarial (Student) (272 Points)
Replied 18 September 2009

iam agree with mr saorabh gupta...

Arti (Jr Manager) (123 Points)
Replied 18 September 2009

all these rules and acts are based on documentation. if u r able to create such required documents then u can do any thing.I am not saying to avoid tax , but we can manage tax . Isn't it?

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 18 September 2009

Aarti

Look there is GAP in any act or section & if you will find that GAP then may be it is beneficial for you & for ur organisation too. But here we are dicussed thing about the Act not about the GAP.

And as you told that we can manage it yes wen manage it but here we have limited edition of any query & also we dont have any paper & document so we can suggest here only according to the Act or rules

Hope you doesn't mind it , we have just clear the things...........