TDS U/s 194-J deductible on ‘Transaction charges’ paid to BSE is as it is ‘fees for technical services’

Brokers to deduct 10% tax on transaction charges for online trading, CIT vs. Kotak Securities Limited (Bombay High Court)- The object of introducing Section 40(a)(ia) as explained in the CBDT circular No. 5 dated 15/7/2005 is to augment compliance of TDS provisions in the case of residents and curb bogus payments. Moreover, though Section 194J was inserted with effect from 1/7/1995, till the assessment year in question that is AY 2005-06 both the revenue and the assessee proceeded on the footing that Section 194J was not applicable to the payment of transaction charges and accordingly, durin...