Tds u/s 194 j

Dear Saurabh,

As per first proviso to sec. 194j, no deduction shall be made-
(A)......
(B) where the amount of such sum or, as the case may be, the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed thirty thousand rupees.

Now first point to be considered is "Credited or paid during the financial year does not exceed thirty thousand rupees."

Proviso just says "during the financial year" not "during the finacial year or years" It means taht we can pay thirty thousand rupees in one financial year without deducting the TDS.

Now second point to be considered is "Likely to be credited or paid during the financial year does not exceed thirty thousand rupees."

Now before making payment of any amount under sec. 194j, we must deduct TDS if the current  payment and any payment which may be paid during the same financial year in aggregate exceeds thirty thousand rupees"

 Lets understand it through a example:
(1) we have taken a professional servicer in financial year 12-13 whose fees is Rs. 30000  and we made payment of Rs. 30000 in 12-13. Here we need not to deduct TDS as the sum paid  does not exceed thirty thousand in a financial year."

(2) Now lets see, we make a contract with effect from 1-10-12 for two years with a Lawyer on retainership basis for monthly payment of Rs. 4000. In this case we need not to deduct TDS for the payment made in october, november, december-12, january, february and march in 2013 as the amount paid or credited or likely to be paid or credited is Rs. 24000 (6*4000) and it does not exceed Rs. 30000 in financial year 1-4-12 to 31-3-13 but we should start deducting TDS in financial year 13-14 even from the very first month i.e. April as the sum likely to be paid or credited is Rs. 48000 i.e. 4000*12 (since there is a contract for two years and it is more likly than not to exceed the limit of 30000 in a financial year) in financial year 13-14 which exceeds the limit of Rs. 30000 in a financial year.) Now in financial year 14-15 we need not to deduct TDS as sum paid or credited or likely to be paid or credited is Rs. 24000 (6*4000).

So you dont need to deduct TDS in any financial year....


 

In my opinion you have to deduct the tax  @ 10% on Rs. 30000/- i.e. Rs. 3000./-  not on Rs. 25000/- as its pertains to previous year.  Further the tax is to be deducted u/s 194J only if amount payable or paid is and more than Rs. 30000/- .