Payment made to advertising agency attracts TDS under Section 194C and not under section 194J, even though there is no written contract

Last updated: 09 August 2021

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The Income Tax Appellate Tribunal (ITAT) has ruled that Tax Deducted at Source (TDS) on payments made to an advertising agency should be under Section 194C of the Income Tax Act, not Section 194J. This applies even if there isn't a formal written contract in place. The ITAT clarified that payments made by a client to an advertising agency are covered by Section 194C, distinguishing this from payments made by the agency to media outlets or professionals, which might fall under Section 194J.

Court :
ITAT Delhi

Brief :
In the matter of M/s. Perfect Probuild P. Ltd. v. DCIT, Circle 76(1) [ ITA No. 1034/Del/2018 order dated August 05, 2021] before the Income Tax Appellate Tribunal (“ITAT”), Delhi, it is held that, TDS has to be deducted u/s 194C of Income Tax Act, 1961 ("the IT Act") on payment made to advertising agency even if there is no written contract.

Citation :
ITA No. 1034/Del/2018 order dated August 05, 2021

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