25 May 2010
Dear Sir, Please consider the following example: An individual doctor who running a clinic refers patient to a Multi speciality hospital (P) LTD., for any special treatment, for that the hospital pays some referal fees to that doctor. Query: 1. Whether Referal fees is liable for TDS, if it exceed prescribed amount during the year? 2. Whether Hospital is liable to deduct TDS u/s 194C or 194J?
25 May 2010
The referral fee is no where defined in the Act. One has to actually find an interpretation to the word referral. It is not a professional fees as mare referral by a doctor does not mean that he has provided any medical services. It is also not a works contract as the referring doctor has not done any work with in the meaning of section 194C. Though, by referring a patient to the hospital, intentionally or unintentionally the doctor has promoted the revenue of the hospital, thus the fees for referral of patient is sharing of revenue with the doctor for promoting sales, which according to my vies is nothing but sales commission, the TDS should be deducted under section 194H on commission.
CAclubindia
