We are having a contract with one of the Human Resource Consultants. The service they are providing is: 1) Providing candidates to fill the vacnacies in our organisation. Again the recruited candidates will be on our organisation's role. 2) Supply of manpower for the organisation requirements (with out any major skill sets, e.g Diploma holders). The candidates will be on contract basis. The service provider has given certificate for lower deduction of TDS @ 1.5%. stating the service as professional service.
Now, my question is whether the above both services will fall under Professional service or can we treat the 2nd service as contract by deducting TDS @ 2%.
11 August 2010
In both the cases, employed persons are of your organisation , the forms are only different like one is direct & the other is on contract.
More appropriate treatment would be "Professional services under section 194 J"
Had this been a clear case of "Labour Contractor" then section 194 C would have applied.
But in your case, Professional services would be more appropriate head.
CAclubindia
