Whether to deduct tds on professional fees under sec 194j

Page no : 2

(Guest)

The company which paid you the fees must have not made provision for the fees payable to you in each of the earlier years. So, now they have debited Rs 75000/- to p& L a/c .They have to deduct tax at source.

But if you have shown the earlier fees (Rs 50000) receivable in earlier years and paid tax on that, you don't have to offer it to tax again now and can claim the entire TDS.

Some professionals usually maintain their accounts on cash basis and tax the income on receipt basis. If you have done so, it would be beneficial for you when TDs is deducted in the year of payment.

doctor (doctor) (3 Points)
Replied 09 March 2016

dear sir

if a pharma firm has done a contract with principal investigator (a medical professional working in a university) for a drug trial and pays fees to university (as per research policy of institute) after 10% TDS deduction, and now when university pays (distributes) the share (50% according to university policy) to principal investigator, does the university liable to deduct 10% TDS again for that 50% share of the payment received ?

(Guest)

Yes. The university will account for the whole amount received as its income from drug trial. For eg Rs 100000/- when it receives from the Pharma company will be shown as income.

When it distributes it to investigator it will be shown as expense of Rs 50000/- in its accounts. So it is necessary that 10% of TDs os deducted on it by the university.

This is not double taxation.