section 194J

Section 194J TDS on Professional or Technical Fees

Income Tax - 1) Who is responsible to deduct tax u/s 194J? Any person, not being an individual or a HUF, who is responsible for paying to a resident any sum by way of:- 1. Fees for professional Services Professions are notified under section 44AA Accountancy Architectural Authorised Representative Company Secretary Engineering Film Artists/Actors, Cam...

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TDS on Fees For Professional or Technical Services

Income Tax - Dear Friends as you are aware that we are a republic state and government is a representative of people of India. We Indians choose our government every five years and government will work for the welfare of the all Indians. The main sources of income of government is collection and levying of various types of […]...

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Analysis of amendment to Section 194J of Income-tax Act 1961

Income Tax - 1. Background: Finance Act 2020, has reduced withholding tax rates for fees for technical services under Section 194J of the Act to 2 percent from the existing rate of 10 percent.  Memorandum to Finance Bill 2020, clarified that this amendment is introduced to reduce existing litigation on account of classification of services under sect...

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Difference between Professional & technical services | Section 194J

Income Tax - Difference between Professional & technical services in the preview of section 194J of Income tax act, 1961 Section 194J of Income tax act, 1961 speaks about the applicability of TDS provisions on Professional and Technical services. Before understanding the difference between both these services, below is key highlights of this s...

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TDS Rate Chart for Financial Year 2020-21

Income Tax - Simple TDS Rate Chart for Financial Year 2020-21 –  Applicable from 14th May 2020 Kindly Note amended rates are been given on the basis of PIB Notification dated 13.05.2020 and on the date of Publication of this post no notification in this regard is been notified by the CBDT. Press release can be accessed at […]...

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Suggestion /representation on 7 Important Direct Tax Issues

Income Tax - Following is the summary of Suggestion /representation on behalf of the taxpayers/professionals in connection with the Direct tax related matter. Detailed reasoning of same is provided in subsequent paragraphs....

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Representation to reduce TDS rate on Professional Fees to 2%

Income Tax - A representation is been made to CBDT Chairman by leading accounting and CA Organisations of India  and it is been requested that current rate of 10% under section 194J of the Act should be reduced to 2% and to Prioritise issue of lower/ nil withholding tax certificates under section 197 of the Act. Full text […]...

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Enhancement Limits for TDS U/s. 194J on professionals to Rs. 1 Lakh: ICAI

Income Tax - It is suggested that the TDS limit for payment of professional or technical fees under section 194J may be increased from Rs. 30000 to Rs. 100000....

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No reopening of Cases Prior to 01.04.2012 & Circular to avoid multilevel TDS on software u/s 194J -FM

Income Tax - On the issue of retrospective amendment, Union Finance Minister, Shri Pranab Mukherjee has said that he had given a commitment in the Parliament with regard to retrospective amendments that CBDT will issue a policy circular to clarify that in cases where assessment proceedings have become final before first day of April, 2012; such cases ...

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TPA is required to Deduct TDS u/s 194J on Payments to Hospitals

CIT Vs TTK Healthcare TPA Pvt. Ltd. (Karnataka High Court) - The issue under consideration is whether Third Party Administrator (TPA) is required to deduct tax at source (TDS) on payments made to hospitals under Section 194J of the Income Tax Act?...

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TPA to Deduct section 194J TDS on Payments to Hospitals

TTK Healthcare TPA Private Limited Vs DCIT-TDS (Karnataka High Court) - The issue under consideration is whether a TPA, was required to deduct tax at source on payments made to hospitals under Section 194J of the Act?...

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TDS not deductible on Trade Offers Provided to Distributors

Nokia India Pvt. Ltd Vs Acit (ITAT Delhi) - Assessee made the detailed submissions inter alia contending that the provision of section 194H, 194C, 194J were not applicable to the case because the payment was not for any contractor of services or work, there was no relationship of agency....

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Roaming charges not ‘fee for technical services’ to attract section 194J TDS

DCIT TDS Vs Reliance Communications Ltd. (ITAT Mumbai) - DCIT TDS Vs Reliance Communications Ltd. (ITAT Mumbai) Roaming charges paid by the assessee to the other telecom service provider are not in the nature of ‘fee for technical services’ no TDS under section 194J is liable to be deducted. Once there is no liability for deducting tax at source, ques...

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Roaming Charges Not Liable for TDS under section 194J

DCIT - TDS Vs Reliance Communications Ltd. (ITAT Mumbai) - The issue under consideration is whether the roaming charges paid by the assessee to the other telecom service provider are in the nature of ‘Fee for technical Services’ and hence liable for deduction of tax at source u/s 194J of the Act?...

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TDS on payments for production of content or programme for telecasting

Circular No. 04/2016- Income Tax - (29/02/2016) - Law Relating to Tax Deduction at Source (TDS) on payments by broadcasters or television channels to production houses for production of content or programme for telecasting....

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Deduction of Tax at source on Service Tax on professional and technical fees

F. No.275/73/2007-IT(B) - (30/06/2008) - Circular No. F. No.275/73/2007-IT(B) Service Tax component to be considered for deducting tax on any sum paid as professional and technical fees under section 194J The Central Board of Direct Taxes (CBDT) has clarified that the payments made under section 194I differ significantly from payments mad...

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Recent Posts in "section 194J"

Section 194J TDS on Professional or Technical Fees

1) Who is responsible to deduct tax u/s 194J? Any person, not being an individual or a HUF, who is responsible for paying to a resident any sum by way of:- 1. Fees for professional Services Professions are notified under section 44AA Accountancy Architectural Authorised Representative Company Secretary Engineering Film Artists/Actors, Cam...

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TPA is required to Deduct TDS u/s 194J on Payments to Hospitals

CIT Vs TTK Healthcare TPA Pvt. Ltd. (Karnataka High Court)

The issue under consideration is whether Third Party Administrator (TPA) is required to deduct tax at source (TDS) on payments made to hospitals under Section 194J of the Income Tax Act?...

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TPA to Deduct section 194J TDS on Payments to Hospitals

TTK Healthcare TPA Private Limited Vs DCIT-TDS (Karnataka High Court)

The issue under consideration is whether a TPA, was required to deduct tax at source on payments made to hospitals under Section 194J of the Act?...

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TDS not deductible on Trade Offers Provided to Distributors

Nokia India Pvt. Ltd Vs Acit (ITAT Delhi)

Assessee made the detailed submissions inter alia contending that the provision of section 194H, 194C, 194J were not applicable to the case because the payment was not for any contractor of services or work, there was no relationship of agency....

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Roaming charges not ‘fee for technical services’ to attract section 194J TDS

DCIT TDS Vs Reliance Communications Ltd. (ITAT Mumbai)

DCIT TDS Vs Reliance Communications Ltd. (ITAT Mumbai) Roaming charges paid by the assessee to the other telecom service provider are not in the nature of ‘fee for technical services’ no TDS under section 194J is liable to be deducted. Once there is no liability for deducting tax at source, question of charging interest under [&hellip...

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Roaming Charges Not Liable for TDS under section 194J

DCIT - TDS Vs Reliance Communications Ltd. (ITAT Mumbai)

The issue under consideration is whether the roaming charges paid by the assessee to the other telecom service provider are in the nature of ‘Fee for technical Services’ and hence liable for deduction of tax at source u/s 194J of the Act?...

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TDS on Fees For Professional or Technical Services

Dear Friends as you are aware that we are a republic state and government is a representative of people of India. We Indians choose our government every five years and government will work for the welfare of the all Indians. The main sources of income of government is collection and levying of various types of […]...

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No disallowance of discount for Non-Deduction of TDS

Dish Tv India Limited Vs. ACIT (ITAT Mumbai)

Whether disallowing expenditure in the nature of discount under section 40(a)(ia) for non-deduction of tax u/s 194J by considering it as commission is justified in law?...

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Suggestion /representation on 7 Important Direct Tax Issues

Following is the summary of Suggestion /representation on behalf of the taxpayers/professionals in connection with the Direct tax related matter. Detailed reasoning of same is provided in subsequent paragraphs....

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No Section 194J TDS on IUC charges paid to other telecom companies

DCIT Vs Vodafone India Ltd. (ITAT Mumbai)

DCIT Vs Vodafone India Ltd. (ITAT Mumbai) We find that for installation / setting up / repairing / servicing / maintenance capacity augmentation are require human intervention but after completing this process mere interconnection between the operators is automatic and does not require any human intervention. The term Inter Connecting Use...

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Analysis of amendment to Section 194J of Income-tax Act 1961

1. Background: Finance Act 2020, has reduced withholding tax rates for fees for technical services under Section 194J of the Act to 2 percent from the existing rate of 10 percent.  Memorandum to Finance Bill 2020, clarified that this amendment is introduced to reduce existing litigation on account of classification of services under sect...

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TDS u/s 194J Applicable on Payments by TPA to Hospitals on behalf of Insurance Companies

Family Health Plan (TPA) Ltd. Vs ITO (ITAT Chennai)

The issue under consideration is whether TDS u/s 194J will be applicable on payments made by TPA to hospitals on behalf of insurance companies for settling medical or insurance claims?...

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No Section 194J TDS on IUC charges paid by Telecom Operators

DCIT-TDS Vs Vodafone India Ltd. (ITAT Mumbai)

Whether interconnection usages charges (IUC) is in the nature of fees for technical services and whether the assessee is liable for TDS under section 194J of Income Tax Act, 1961?...

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No TDS u/s 194H for Prepaid SIM & 194J for Roaming Charges

Vodafone Idea Limited Vs ACIT-TDS (ITAT Cuttack)

AO considered assessee as assessee in default in respect of non-deduction of TDS under Section 194H and 194J of the Act on payment of commission and fees for professional or technical services and passed an order under Section 201(1) & 201(1A) of the Act....

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Difference between Professional & technical services | Section 194J

Difference between Professional & technical services in the preview of section 194J of Income tax act, 1961 Section 194J of Income tax act, 1961 speaks about the applicability of TDS provisions on Professional and Technical services. Before understanding the difference between both these services, below is key highlights of this s...

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TDS Rate Chart for Financial Year 2020-21

Simple TDS Rate Chart for Financial Year 2020-21 –  Applicable from 14th May 2020 Kindly Note amended rates are been given on the basis of PIB Notification dated 13.05.2020 and on the date of Publication of this post no notification in this regard is been notified by the CBDT. Press release can be accessed at […]...

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Time To Differentiate Between FPS & FTS – Brief Analysis of Amended Section 194J For AY 2021-22

For financial year 2020-21 (PY 2020-21 / AY 2021-22), the Finance Act, 2020 seems to have created few issues by unsettling some sections which were very well otherwise settled. In an attempt to cover revenue leakage, abolishing tax-evasion methods and to make law simpler – seeds of confusion and lack of clarity have been roped [&hel...

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TDS Rate Chart for FY 2020-21 / AY 2021-22 – Updated

TDS Rate Chart For Assessment year 2021-22 /Financial Year 2020-21 As we all are aware that yesterday our Honourable Finance Minister has conducted press release. In that press release she declared that The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 percent of the […]...

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TDS U/s. 194A, 194J & 193 of Income Tax Act, 1961

For quick and efficient collection of taxes, the Income-tax Law has incorporated a system of deduction of tax at the point of generation of income. This system is called Tax Deducted at Source commonly known as TDS. Under this system, tax is deducted at the point of origination of income. Tax is deducted by the payer and the same is direc...

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TDS u/s 194J not applicable on modeling services rendered by Katrina Kaif

DCIT (TDS) Vs Kodak India (P) Ltd. (ITAT Mumbai)

The issue under consideration is whether the services, the modeling, rendered by Ms. Katrina Kaif in this case constitutes professional service and the fee paid to her for modeling with the purpose of marketing of the camera products of the assessee liable for TDS u/s 194J?...

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Confusion on section 194J TDS for Technical Service- Finance Act 2020

Finance Act 2020 – TDS under section 194J FA 2020 has introduced lower rate of deduction @ 2% instead of 10%, under section 194J, if the service is in the nature of: 1. Technical service; or 2. Royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films For the part of […]...

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TDS rate Changes vide Finance Act 2020

In Budget 2020, Government has made various amendment either changes in existing TDS/TCS Rates or addendum new TDS/TCS Rates, A.Y 2021-22 TDS Rates  Chart (Specific to Changes in Budget) Changes in Existing Rate Sr.No Nature of Payment Section Limit          TDS Rate for         Ind. and HUF Other than Ind. and HUF If [&hell...

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Section 194J: Professional & Technical Services – Royalty payments

Section 194J: Professional & Technical Services – Royalty payments > As per the provisions of Section 194J of Income Tax Act 1961, any person other than Individual or HUF shall be liable to deduct TDS at 10%, if any sum exceeding INR 30,000/- is paid by way of: a) Fee for professional services, b) Fee […]...

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TDS Provisions related to Small Businesses & Covid 19 Relief

TAX DEDUCTION AT SOURCE (TDS) In order to ensure better tax compliance and ensuring the timely payment of tax to the Government treasury, a mechanism has been established by making it mandatory for certain persons responsible for making payment of some expenses to deduct tax from such payment and deposit it to the Government account. [&he...

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Sec 194J TDS deductible on Toll Free Telephone charges (Royalty)

Vidal Health Insurance TPA (P.) Ltd. Vs JCIT (ITAT Bangalore)

Payments made by assessee towards toll-free telephone charges is royalty, in terms of section 9(1)(vi) of the Act, and is liable to deduct TDS under section 194J of the Act. We therefore are in agreement with the view taken by Ld.CIT (A)....

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Principle of ‘Noscitur a Sociis’

The principle of Noscitur a Sociis is a rule of construction. It is one of the rules of language used by court to interpret legislation. This means that, the meaning of an unclear word or phrase should be determined by the words immediately surrounding it. In other words, the meaning of a word is to be judged by the company it keeps. ...

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Analysis of Section 194J- Amendment for Financial Year 2020-21

As per Budget 2020,  TDS under section 194J at the rate of 10% is applicable on the professional Charges , royalty, remuneration or fees to director, fees for not carrying out any work , fees for not sharing any know how or patent or copyright and in case of Technical Charges,  TDS is applicable at the rate of 2% under section 194J of t...

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Representation to reduce TDS rate on Professional Fees to 2%

A representation is been made to CBDT Chairman by leading accounting and CA Organisations of India  and it is been requested that current rate of 10% under section 194J of the Act should be reduced to 2% and to Prioritise issue of lower/ nil withholding tax certificates under section 197 of the Act. Full text […]...

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TDS provisions as amended vide Finance Act, 2020

Article explains Amendments as passed by The Finance Act, 2020 on 27 March 2020 viz viz Amendments as introduced by The Finance Bill, 2020 on 1 February 2020 related to Section 194A and SECTION 197A by which Central Government Is Empowered To Provide For A Lower Rate Of TDS, Section 194J related to TDS In […]...

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Amendments in TDS/TCS applicable from FY 2020-21

Amendments in the Provisions of of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) applicable from Assessment Year  2021-22 (i.e Financial year 2020-21) Through the Finance Act 2020 (which have received the assent of the President of India on 27th March 2020), the Central Government has made various amendments to existing ...

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Section 194J TDS on Fees for Professional or Technical Services

The present article features the TDS provisions contained under section 194J of the Income Tax Act, 1961 relating to the TDS deduction on fees for professional or technical services. Coverage of Section 194J of the Income Tax Act Categories of the person covered under section 194J Every person, except an individual or a HUF, making payme...

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Section 194J- FAQs- TDS on Professional or Technical Services Fees

Who is liable to deduct TDS u/s 194J? What is the point of deduction of TDS u/s 194J? At what rate tax to be deducted u/s 194J? Under what circumstances there is no need to deduct TDS u/s 194J? What is the meaning of professional Services in reference to S. 194J? ...

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Income Tax treatment of amount paid towards Software Purchase

The question as to whether the expenditure incurred towards purchase of computer software should be treated as revenue or capital in nature. Law has been well settled since 2012, still there different treatments in industry to treat the same as revenue or capital. So through this Article, I am trying to conclude whether the amount [&helli...

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TDS: Some Practical and Procedural Issues

Tax deduction at source is considered as a major tool to curb tax evasion and Governments have, wherever possible, introduced TDS provisions in tax laws both in direct taxation and indirect taxation. In this article the author is trying to throw light on some practical and procedural issues in Income Tax – TDS....

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TDS Rates for Financial Year 2020-21 & Assessment Year 2021-22

Article compiles TDS Rate Chart For Financial Year 2020-21 and Assessment Year 2021-22 along with Due date of Payment of TDS and mode of Payment of TDS. Article explains Section under which TDS is deductible and TDS Rate Applicable. Article Covers Change in TDS Applicable from 01.04.2020 which was proposed by Union BUdget 2020 which [&hel...

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No Disallowance for non deduction of TDS u/s 194H /194J in absence of principal-agent relationship & technical services

Nokia India Pvt. Ltd. Vs DCIT (ITAT Delhi)

Disallowance under Section 40(a)(ia) for non deduction of TDS u/s 194H and 194J on account of trade offers amounting to INR 834,92,63,976 provided by assessee to its distributors (HCL Info systems Ltd as well as other distributors) was not justified as there was absence of a principal-agent relationship thus, benefit extended to distribut...

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Section 194J: TDS on technical service fees reduced to 2%

Reducing the rate of TDS on fees for technical services (other than professional services). Section 194J breaks in two different rates 2% and 10% for fees for technical services and fees for professional services respectively Section 194J of the Act provides that any person, not being an individual or a HUF, who is responsible for [&helli...

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TDS on Power Transmission & Wheeling Charges u/s 194J, 194I, 194C

Has the Contentious Issue of Applicability or Otherwise of TDS on Transmission & Wheeling Charges of Power Transmission Companies u/s 194J, 194I & 194C of the Income Tax Act, 1961, finally Settled???...

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Private healthcare sector: Income tax incentives, Provisions & Judgments

Private healthcare sector: Income tax incentives, Legal Provisions and Judgments This article covers various sections related to healthcare sector such as Section 10(23C), Section 44A, Section 44AB, Section 11, Section 12, Section 35AD, Section 194I, Section 194h, Section J and many more along with various related case laws. Legal Provisi...

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TDS Rates | A.Y 2020-21 | Salary, Rent, Brokerage, Contract, Professional Fees

In this article, we look at transactions that require TDS deduction and the TDS rates for AY 2020-21. In some transaction, the person making payment is required to deduct tax at source (TDS) while making payment....

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Salary cannot be disallowed for mere non furnishing copies of appointment order, attendance register

Manne Hareesh Vs ITO (ITAT Hyderabad)

Manne Hareesh Vs ITO (ITAT Hyderabad) During the course of scrutiny assessment proceedings, it was observed by the Ld. AO that the assessee has debited in his P & L Account an amount of Rs. 2,40,000 towards Accounting Charges. On query, it was explained by the assessee that the outstanding amount of Rs. 2,40,000 was […]...

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TDS Under section 194C deductible on Payment of outsourcing expenses

CIT Vs M/s Reliance Life Insurance Co. Ltd. (Bombay High Court)

Where assessee had hired the services for various works such as storage of data, scanning of documents, processing charges, call center operations, etc. and the same were basically clerical services of repetitive nature of work therefore, work outsourced was in the nature of clerical work and was rightly deducted under section 194C....

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TDS cannot be imposed on payment made before amendment of law

DCIT (TDS) Vs M/s. Rediff. Com. India Ltd. (ITAT Mumbai)

Even though amendment was given a retrospective effect but by that time assessee had already done the transactions without complying section 194J for payment made towards data line charges, therefore, assessee could not be held to have violated the provisions of section 194J, because the law cannot possibly compel a person to do something...

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TDS Rate Chart for AY 2020-21/FY 2019-20

TDS Rate Chart or TDS Rate Table For Assessment year 2020-21 (AY) / Financial Year (FY) 2019-20 In the case of a person other than a company (Resident and Non-Resident) i.e. Individual, HUF, BOI, AOP, Artificial Judicial Persons. Partnership Firm (Including LLP) and for domestic company and Foreign Companies. TDS Rates are after consideri...

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Payments to teachers/ lecturers/ staff is covered u/s 192 and not u/s 194J

Principal Sri Sathya Sai College for Women Vs ITO (ITAT Jaipur)

Principal Sri Sathya Sai College for Women Vs ITO (ITAT Jaipur) Assessee college has issued appointment letters to teachers/ lecturers/ staff members from time to time to whom salary was paid. The monthwise salary sheet was also prepared by the college on the basis of the attendance register of the employees. The salary was paid […...

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TDS on Outsourcing expenses of Clerical Nature deductible U/s. 194C

CIT Vs M/s. Reliance Life Insurance Co Ltd (Bombay High Court)

CIT Vs M/s. Reliance Life Insurance Co Ltd (Bombay High Court) Assessee had hired the services for various works such as storage of data, scanning of documents, processing charges, call centre operations etc. Looking to the nature of services outsourced, it was held that the same were basically clerical services of repetitive nature of wo...

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TDS not deductible on Payment made for conduct of exam through affiliated centers

Pr. CIT (Central) Vs M/s. M.P. Biscuits Pvt. Ltd (Allahabad High Court)

In the absence of any material to establish that the affiliated colleges/centres were rendering services of professional or technical nature in the matter of conducting the University's examination, we are of the opinion that the Tribunal has not committed any error of law in holding that the tax was not deductable on such reimbursement u...

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Individual/HUF to deduct TDS on payment to contractors & professionals

Tax Deduction at Source (TDS) on payment by Individual/HUF to contractors and professionals under new section 194M At present there is no liability on an individual or Hindu undivided family (HUF) to deduct tax at source on any payment made to a resident contractor or professional when it is for personal use. Further, if the […]...

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TDS U/s. 194J deductible on investigation charges paid by Bank on assessee’s behalf

Addl. CIT Vs Hiravati Marine Products Pvt. Ltd. (ITAT Rajkot)

Merely the payment of investigation charges to the chartered accountant firm was made by the bank on behalf of the assessee did not mean that the transaction was covered under the provisions of section 194A read with section 2(28A). As such the assessee was liable to deduct the TDS under section 194J and thus, assessee was not eligible fo...

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Reimbursable expense cannot be disallowed for Non-deduction of TDS

Pr. CIT Vs DLF Commercial Projects Corporation (Delhi High Court)

Pr. CIT Vs DLF Commercial Projects Corporation (Delhi High Court) Neither the provisions of section 194C nor section 194J obliges the person making the payment to deduct anything from contractual payments such as those made for reimbursement of expenses, other than what is defined as “income”. The law thus obliges only amounts...

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TDS u/s 194C applies on Payments for catering services

CIT Vs Saifee Hospital Trust (Bombay High Court)

CIT Vs Saifee Hospital Trust (Bombay High Court) The Assessing Officer held that services of catering rendered by M/s Monginis is technical service and therefore, deduction of tax at source by the respondent has to be under Section 194J of the Act. However, in appeal both the Commissioner of Income Tax (Appeals) (CIT(A)) as well […...

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TDS U/s. 194C deductible on AMC for repairs/maintenance of computers

Jagran Prakashan Ltd. Vs ACIT (TDS) (ITAT Lucknow)

Expenditure on account of AMC for repairs and maintenance of computers installed at assessee’s office premises were payments of contractual nature without involving any technical or professional skill or knowledge. Therefore, TDS was rightly deducted by assessee under section 194C, instead of 194J....

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TDS Rate Chart for the FY-2019-2020

TDS Rate Chart for the Financial Year (FY) -2019-2020 / TDS Rate Chart for the Assessment Year (AY) -2020-2021. Article Prescribes Nature of Payment on which TDS is deductible, Section under which TDS is deductible, Basic amount per annum on which TDS is not deductible, TDS rate if PAN is not deductible. TDS rates are […]...

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TDS U/s. 194J deductible on Fees shared between hospital & doctors

CIT Vs Asian Heart Institute and Research Centre Pvt. Ltd. (Bombay High Court)

CIT Vs Asian Heart Institute and Research Centre Pvt. Ltd. (Bombay High Court) In the present case, it has been recorded that the doctors were entitled to admit, investigate and provide treatment to the patients and that the doctors would be responsible for their clinical care. The doctors were responsible for supervising the sub-ordinate...

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Payments to artists for taking part in reality show liable for TDS u/s 194C

M/s. Malayalam Communications Ltd. Vs ITO (TDS) (ITAT Cochin)

Payments made to various artists participating in reality show would fall under section 194C  and not under section 194J  and there was no infirmity in the action of AO as assessee had rightly deducted TDS u/s 194C....

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No TDS U/s. 194J on charges paid to unqualified professional

Nikhil Chandra Mitra Vs ITO (ITAT Kolkata)

Nikhil Chandra Mitra Vs ITO (ITAT Kolkata) Disallowance of Rs.60,000/- made on account of accounting charges by invoking the provisions u/s 40(a)(ia) of the Act.  The assessee submits that the person whom the amount was paid was not a qualified professional and he was an accountant writing the accounts and hence 194J of the Act, [&hellip...

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TDS not deductible on Reimbursement of Expenses for conducting Exams

CIT Vs The Registrar, Csjm University, Kalyanpur (Allahabad High Court)

The facts of the case reveal that the Assessee-University conducts examinations through various colleges affiliated to it. The affiliated colleges function as the examination centre. These affiliated colleges/centres in holding the examinations incur various types of expenditure both administrative and procedural. The Assessee-University ...

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TDS U/s. 194J not deductible on fees for Translation of Articles

Shri Goutam Mukhopadhyay Vs PCIT (ITAT Kolkata)

Shri Goutam Mukhopadhyay Vs PCIT (ITAT Kolkata) It is not in dispute that the assessee has made payment of Rs. 96,000/- to Mahua Basu Mallick for displaying articles towards Cancel Awareness Programme in Bengali language pursuant to dictations given by the assessee in English. In effect, this is nothing but a payment made for translation ...

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TDS on G Suite

There are various issues with regard to the applicability of Tax Deduction at Source (TDS) on G suite transaction and the same is taken up in the current article....

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Executive Summary of Finance Bill, 2019 ‐ Direct Taxes

Finance Bill,2019 has proposed amendments to  Standard deduction, Notional Income of two self-occupied property, Interest on capital borrowed for acquisition / construction of two self occupied  House properties, Exemption under Section 54, Interest on capital borrowed for acquisition / construction of two self occupied  House properti...

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TDS not deductible on payments of Roaming Charges

Ms Idea Cellular Ltd. Vs  ACIT (ITAT Delhi)

M/s Idea Cellular Ltd. Vs  ACIT (ITAT Delhi) In the absence of any human intervention during the actual roaming process, payment would not be fee for technical services and cannot be regarded as payments to Section 194J are applicable. FULL TEXT OF THE ITAT JUDGMENT Challenging the order dated 18.3.2015 passed by the learned Commissione...

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No TDS on Land Acquisition from Illegal Occupants by MMRDA

CIT (TDS) Vs M/s Mumbai Metropolitan Regional (Bombay High Court)

CIT (TDS) Vs M/s Mumbai Metropolitan Regional (Bombay High Court) Section 194LA of the I.T.Act, 1961 inter alia deals with payment of compensation on acquisition of certain immovable property. Section 194LA of the I.T.Act, 1961 was brought into force with effect from 1st October, 2004. Section 194L of the I.T.Act, 1961 deals with payment ...

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TDS not deductible on Internet connectivity charges & specialised line rental

ACIT Vs SDV International Logistics Ltd. (ITAT Kolkata)

ACIT Vs SDV International Logistics Ltd. (ITAT Kolkata) it is observed that the assessee company was held to be liable to deduct tax at source by the A.O. from the payment of internet connectivity charges and specialised line rental u/s 194J of the Act being in the nature of royalty by relying on Explanations 4, […]...

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Disallowance justified for non deduction of TDS on Provision for Audit Fees

Citadel Fine Pharmaceuticals (P.) Ltd. Vs Asstt. CIT (ITAT Chennai)

Since assessee had made provision for audit fees to account of payee, provisions of section 194J were clearly attracted and non-deduction of tax at source would automatically invite disallowance under section 40(a)(ia)....

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TDS U/s. 194C deductible on charges towards installation of set top boxes

JCIT Vs Bharat Business Channels Ltd. (ITAT Mumbai)

Installation of set-top box amounted to works contract and no technical expertise was required so as to make the assessee liable to deduct tax under section 194J....

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Don’t Take TDS Lightly

Nowadays delay in payment of TDS and in TDS return Filing makes an assessee liable to Late Payment Interest, Late Payment Penalty, Late Filing Fees, Late Filing Penalty and Further makes him liable to prosecution under the provision of the Income Tax Act, 1961....

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Posted Under: Income Tax |

TDS on Electricity Bill reimbursement to landlord

Issue: Whether the TDS provisions are applicable on payment of electricity reimbursement to landlord in case of there is no mark-up? Opinion The opinion is based on the following two questions: Whether the invoice from landlord as same from Electricity Department? Whether the invoice from landlord is composite supply? The first question h...

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Posted Under: Income Tax |

TDS U/s. 194 not applicable on reimbursement of Payment

CIT Vs Kalyani Steels Ltd. (Karnataka High Court)

As such, the assessee cannot be treated as the assessee in default in not deducting tax at source under section 194J of the Act. The arguments of the revenue that the fees paid by the assessee is towards technical services is imaginary one not established with substantial material....

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TDS U/s. 194J not deductible on Payment for outright purchase of copyright and technical know-how

Pidilite Industries Ltd. Vs ITO (ITAT Mumbai) I.T.A No.2174/Mum/2014

Payment towards outright purchase of copyright and technical know-how over the software could not be treated as royalty paid for acquisition of right to use copyrights and technical know-how, therefore, said payment could not be subjected to TDS under section 194J....

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TDS not deductible on service tax component on rent

Transocean Offshore Deepwater Drilling Inc. Vs Addl. CIT (ITAT Delhi)

Transocean Offshore Deepwater Drilling Inc. Vs Addl. CIT (ITAT Delhi) CBDT itself in two of its circulars. In Circular No. 4/2008 dated 28th April 2008 it was clarified that Service tax paid by the tenant doesn’t partake the nature of income of the landlord. The landlord only acts as a collecting agency for Government for […]...

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In absence of understanding between parties about reimbursement TDS is deductible on Salary paid to Staff

Power Plant Engineers Ltd. Vs ITO (ITAT Delhi)

Power Plant Engineers Ltd. Vs ITO (ITAT Delhi) It is apparent that the persons deputed by the recipient of the income were not routine employees, but were highly qualified and technical employees who were providing the head and brain’ to the assessee company. It cannot be said to be the reimbursement of salary expenditure when […...

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AO cannot reopen the case without bringing something new on record

DCIT Vs M/s. Idea Cellular Ltd. (ITAT Mumbai)

Challenging the order dated 28/01/2016 of CIT(A)-8,Mumbai,the Assessing Officer (AO) has filed the present appeal. The assessee has raised a Cross Objection for the same.Assessee - company engaged in providing cellular mobile services and trades in accessories filed its return of income at Rs.Nil after set off of brought forward business ...

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Section 195 Payment towards Import of Software Amounts to Royalty

Telecomone Teleservices India Private Limited Vs The Deputy Commissioner of Income Tax (ITAT Bangalore)

The CIT (A) has failed to understand that your appellant was not under any legal obligation to effect TDS on purchase of Computer Software in F.Y. 2011-12 as these were considered as purchase of goods under the then existing provisions of law and subjected to customs duty. Purchase of computer software was brought under the definition of ...

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TDS u/s 194C applicable in case contract requires semi-skilled staff

ACIT (LTU) Vs. M/s WTI Advance Technology Ltd. (ITAT Mumbai)

ITAT Mumbai in case of ACIT v/s M/s WTI Advanced technology held that tax is to deducted u/s 194C for outsourcing of any service which do not require skilled staff....

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Technical provided by Machines would not fall U/s. 194J for TDS

M/s. Coimbatore Integrated Waste Vs. DCIT (ITAT Mumbai)

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) recently ruled that technical services would not include services provided by the machines for the purpose of Tax Deducted at Source ( TDS )....

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TDS deductible on Audit Fees provision credited to Auditors Account

Citadel Fine Pharmaceuticals (P.) Ltd. Vs ACIT (ITAT Chennai)

On perusal of section 194J of the Act, we find that tax is deductible at source either at the time of credit of expenditure to the account of the payee or at the time of payment whichever is earlier. In the instant case, the assessee had made provision for audit fees to the account of the payee which fact has been mentioned by the ld CITA...

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Assessee cannot be asked to comply with a provision not in force at relevant time

CIT Vs. NGC Networks (India) Pvt. Ltd (Bombay High Court)

A party cannot be called upon to perform an impossible Act i.e. to comply with a provision not in force at the relevant time but introduced later by retrospective amendment. S. 40(a)(i) dis allowance can be made only if the royalty falls under Explanation 2 to s. 9(1)(vi) but not if it falls under Explanation 6 to s. 9(1)(vi)...

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TDS on hired vehicles u/s 194I or under 194C ?

CIT Vs Pioneer Peresonalised Holidays (P.) Ltd (Kerala High Court)

Hiring of vehicles does not fall within the ambit of Section 194C of the Act. From 01.06.2007 definitely deduction would have to be made at source even for hiring of vehicles as Section 194-I of the Act stands amended to bring in such transactions also....

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TDS not deductible on Roaming Charges & Discounts to Distributors

The Dy. CIT Vs M/s. Vodafone West Ltd. (ITAT Ahmedabad)

Roaming services are provided by telecom operators are in the nature of use of standard facilities, which do not require any human interface. Further, since the roaming charges are not paid for rendering managerial, technical or consultancy services, said services cannot be construed as fees for technical series as defined under provision...

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TDS U/s. 194J not deductible on interconnect usage charges

M/s Tata Teleservices Ltd Vs. Income Tax Officer (ITAT Delhi)

Payment for IUC Charges is not chargeable to tax in India in the hands of the non-resident recipients and hence TDS was not deductible as per provisions of section 195 of the Act....

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Criteria to decide whether any service rendered will fall U/s. 194C or 194J: An Analysis

Whether TDS is deductible u/s 194C or 194J is always a matter of concern in day to day business world. Today an attempt has been made to provide the basis to reduce such concern. The write-up can be summed up in following parts: 1. Payment to Contractors – Section 194C 2. Fee for professional or technical services – Section 194J 3...

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Posted Under: Income Tax |

Enhancement Limits for TDS U/s. 194J on professionals to Rs. 1 Lakh: ICAI

It is suggested that the TDS limit for payment of professional or technical fees under section 194J may be increased from Rs. 30000 to Rs. 100000....

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Posted Under: Income Tax |

Payment for annual maintenance contracts could not be classified as fee for technical services

DHL Air Ltd. Vs. Dy. CIT (IT) (ITAT Mumbai)

It was held that the payment made for annual maintenance contracts would not fall under the category of fee for technical services within the meaning of provisions of section 194J of the Act. ...

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TDS on AMC of medical equipments by Hospital- Section 194C or Section 194J?

ITO Vs. Balabhai Nanavati Hospital (ITAT Mumbai)

Expenditure on account of AMC of medical equipments etc., is not in the nature of fee for professional and technical services as construed under section 194J of the Act and hence, not liable to deduct TDS under section 194J of the Act. The assessee has deducted TDS under section 194C of the Act in regard to payments on AMC of medical equi...

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Penalty u/s 271C justified for non-deduction of TDS on non-compete fee with no reasonable cause for non-deduction

M/s. Ushodaya Enterprises Vs. DCIT (TDS) (ITAT Hyderabad)

Contention of the assessee that the non-compete fee is the business expenditure of the assessee has been upheld. The assessee has always contended that it is its business expenditure and therefore, it was required to deduct the tax at source u/s 194J of the Act. For failure to deduct the tax inspite of being liable to do so, the penalty u...

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TDS U/s. 194J not applicable on Roaming Charges

The Assistant Commissioner of Income Tax Vs. M/s Vodafone Mobile Service Ltd. (ITAT Chennai)

Tribunal found that roaming charges cannot be considered as fee for technical services, therefore, the provisions of Section 194J of the Income-tax Act, 1961 is not applicable. ...

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Sect. 36(1)(iii)- Interest-free loans & allowability of Interest on borrowings

Pr. CIT Vs. Consumer Marketing (India) (P) Ltd. (Gujarat High Court)

Where assessee paid interest on term loan which had entirely been used for purpose of purchasing the assets for purpose of business which were hypothecated to bank and it had sufficient interest-free funds to take care of advances, the deduction under section 36(1)(iii) was allowable....

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TDS U/s. 194J not applicable on Fee for allowing use of technical System

ACIT Vs. M/s Noida Power Company Ltd. (ITAT Delhi)

Section 194J would have application only when the technology or technical knowledge, experiences/ skills of a person is made available to others which can be further used by him for its own purpose and not where by using technical systems, services are rendered to others. ...

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Payments made towards making copies of films- TDS U/s. 194C or 194J?

DCIT Vs. Yash Raj Films (P) Ltd. (ITAT Mumbai)

DCIT Vs. Yash Raj Films (P) Ltd. (ITAT Mumbai) In this case stand of assessee has been that assessee company had deducted TDS on the negative processing charges paid to Kodak India Ltd. as per the provisions of section 194J of the Act, as the negative processing involves specific tasks of editing, enhancement of quality […]...

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Demand for short/non deduction of tax cannot be enforced, if due taxes were paid by recipient

Standard Chartered Bank (Taxn. Deptt) Vs ACIT (ITAT Mumbai)

Challenging the orders dated 14/03/2014 and 14/07/2014 of the CIT(A)-14, Mumbai the assessee has filed the present appeals for the above mentioned Assessment Years(AY.s). Assessee is a foreign bank and is providing banking services....

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TDS on Payment to Radio Jockies – Section 192 Vs. Section 194J

ITO Vs Entertainment Network (I) Ltd. (ITAT Mumbai)

Since advertising agency only acting as an intermediary between assessee radio broadcasting station and the advertiser, raised bills to the advertiser on net amount charged by the assessee, charging separate commission from the advertiser, deduction from the gross amount was in the nature of discount only and not commission, therefore, li...

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TDS u/s 194C applies on Channel Carriage Fees, Up-Linking & Bandwidth Charges

Income Tax Officer Vs. Media Worldwide Pvt. Ltd. (ITAT Kolkata)

No technical services were involved in payment of carriage charges made by the assessee for broadcasting of the programmes produced by the assessee. The assessee produced various types of programmes/ serials and news and these were telecasted/ broadcasted through Multi System Operators. Payments in this regard were made as carriage charge...

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TDS U/s. 194C applicable on taking out final negative of films

Red Chillies Entertainment Pvt. Ltd. Vs ACIT.(TDS) (ITAT Mumbai)

It has been submitted that taking out of the final negative of the films does not involve rendering of any technical or professional services. Therefore, TDS is required to be deducted u/s 194C....

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TDS deductible U/s. 192 instead of 194J if employee- employer relationship exist

Red Chillies Entertainment Pvt. Ltd. Vs ACIT.(TDS) (ITAT Mumbai)

Remuneration paid to six professionals engaged by the company was liable for deduction of tax at source u/s 192 as the same was in the nature of salary as against the claim of the assessee to deduct tax u/s 194J on these payments on the ground that these persons were acting in the capacity of independent professionals and not as employee ...

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Section 194J TDS not applicable to payment made in kind

Red Chillies Entertainment Pvt. Ltd. Vs Asstt. Commissioner of Income Tax (ITAT Mumbai)

TDS is applicable in case of payment of any sum towards fees for professional services. He submitted, the term any sum, used in section 194J would denote payment in money terms and not in kind. ...

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Budget 2017: Increase 2 crore Turnover limit for section 194A/ 194H/ 194I & 194J

Section 44AB - Increased threshold for presumptive tax cases under section 44AD - Consequential amendments required in section 194A/ 194H/ 194I & 194J...

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Posted Under: Income Tax | ,

SC explains TDS on construction, erection & commissioning of plants

Pr. CIT Vs The Senior Manager (Finance), Bharat Heavy Ltd., (Punjab and Hariyana High court)

These are usual clauses in such contracts. The testing, pre-commissioning, commissioning and post-commissioning are required to be carried out by a contractor to satisfy the customer that the work has been executed in a proper manne...

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TDS Rates Chart for FY 2017-18 / AY 2018-19

TDS Rates Chart for Financial Year 2017-18/ Assessment Year 2018-19 vide Finance Act 2017 i.e Budget 2017-18. We have updated the TDS rate chart considering the amendments made by Finance Act, 2017....

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Posted Under: Income Tax |

S.194J TDS rate proposed at 2% on Call Center business Income

In order to promote ease of doing business, it is proposed to amend section 194J to reduce the rate of deduction of tax at source to two per cent. from ten per cent. in case of payments received or credited to a payee, being a person engaged only in the business of operation of call center....

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Posted Under: Income Tax |

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