Applicability of tds u/s 194j on honorarium
This query is : Resolved
07 December 2011
Honorarium is not specified in professional and technical services definition u/s 44AA and Sec 9 respectively....then how is it eligible for deduction??
08 December 2011
Section 194J. FEES FOR PROFESSIONAL OR TECHNICAL SERVICES.
(1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of -
(a) Fees for professional services, or
(b) Fees for technical services, shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax on income comprised therein
Explanation : For the purposes of this section, - (a) "Professional services" means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or of this section;
(b) "Fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9
PLease read the explanation very minutely for it states that ''OR AS IS NOTIFIED BY THE BOARD'' therefore it is not that for only the professional incomes stated in sec 44AA the section has been formulated but for all other purposes for which an income can be generated by the specified professionals the TDS has to be deducted.
CA. RICHI SAXENA
(1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of -
(a) Fees for professional services, or
(b) Fees for technical services, shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax on income comprised therein
Explanation : For the purposes of this section, - (a) "Professional services" means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or of this section;
(b) "Fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9
PLease read the explanation very minutely for it states that ''OR AS IS NOTIFIED BY THE BOARD'' therefore it is not that for only the professional incomes stated in sec 44AA the section has been formulated but for all other purposes for which an income can be generated by the specified professionals the TDS has to be deducted.
CA. RICHI SAXENA
08 December 2011
Yes i have read that and its not in the notified list too...the notified services are of CS, Authorised representative,information technology and sports related services like umpire,columnist,etc and film actors
08 December 2011
Sec. 194j will be applicable.
08 December 2011
An honorarium is an amount of money paid to somebody, especially to a professional or famous person. A fee for providing a service.
That is why honorarium comes within the ambit of professional or technical services and this in turn is the reason for its inclusion under 194J
That is why honorarium comes within the ambit of professional or technical services and this in turn is the reason for its inclusion under 194J
08 December 2011
So... its not in the law but because everyone does so...we will also have to do the same??
08 December 2011
See tanvi we have to read and understand any tax law from the general perceptibility as well because the interpretations of the statutes is also of prime importance and its not that we have to read the sections as they are but something more is necessary to broaden the outlook incase some missing factors are there. The finance ministry might have specified all the particular professional and technical services on which TDS is to be deducted but it didn't went for it so it is the responsibility of professionals to consider according to their knowledge as to what may constitute such services and levy tax upon it.And for this matter if a general perception exists then that perception is followed.
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08 December 2011
In my opinion, Fees included honorarium. Hence section 194J is applicable.
09 December 2011
yes sir that's why 194J is applicable but in case had it been honorarium alone then also as it is a sort of fees itself so the section would have been itself applicable.
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