Part 194J: TDS on Skilled/ Technical Charges @ 10%

As perPart 194J of the Earnings Tax Act, TDS is to be deducted @ 10% on any quantity paid to any resident as:-

  1. Charges for skilled companies, or
  2. Charges for technical companies, or
  3. Royalty, or
  4. Any sum referred in Part 28 (Mentioned beneath)

Exceptions to TDS Deduction below Part 194J

  1. No TDS needs to be deducted below part 194J if the quantity paid or more likely to be paid through the monetary 12 months doesn’t exceed Rs. 30,000.
  2.  TDS is liable to be deducted by all class of individuals besides People and HUF. Nonetheless, if such Particular person/HUF is liable to get his tax audit carried out below Part 44AB for the earlier monetary 12 months, this exception received’t be relevant and they’d even be required to deduct TDS below Part 194J.

Nonetheless, such particular person or HUF shall not be liable to deduct TDS on the sum by means of skilled or technical companies in case such sum is paid solely for private functions of such particular person or any member of HUF.

Sums referred to in part 28

As per Clause (va) of Part 28 (added by the taxation modification act w.e.f. 13-07-2006), any quantity, whether or not obtained or receivable, in money or in form shall be taxable below the top PGBP, if such cost is below an settlement for:-

  • Not finishing up any exercise in relation to any enterprise; or
  • Not sharing any know-how, patent, copyright, trademark, license, franchise and many others

Which means of Skilled/ Technical Service for the aim of Part 194J

Skilled Companies means companies rendered by an individual in the middle of carrying on authorized, medical, engineering or architectural occupation or the occupation of accountancy or technical consultancy or inside ornament or promoting or such different occupation as is notified by the Board for the needs of Part 44AA.

Different professions notified by the board for the needs of Part 44AA are – “occupation of authorised consultant”, “occupation of movie artist” and “occupation of firm secretary”

Charges for Technical Companies means charges for any rendering of any managerial, technical or consultancy companies (together with provision of companies of technical or different personnel).

Different Related Factors relating to Part 194J

  1. The place any sum referred to on this part is credit score to any account whether or not referred to as “suspense account” or by another identify, within the books of accounts of the particular person liable to pay such sum, such crediting shall be deemed to be credit score of such sum to the account of the payee and the provisions of part 194J shall apply accordingly.
  2. The particular person deducting the TDS below Part 194J shall subject a tax credit score certificates in Type 16A indicating the quantity paid and the TDS deducted thereon.
  3. In case any cost is being made to an individual engaged solely within the enterprise of operation of name middle, TDS could be deducted @ 2% (Launched in Finances 2017)

Credit score of the TDS deducted below part 194J might be claimed on the time of submitting of Earnings Tax Return by the one who has obtained the cost.

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