Tds Applicability payment made to Non-Profitable Orgnisation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 August 2010 Dear Experts,

we have made an agreement with NGO(non profitable organization)registered under society Act and also having 80G Certificates.

we have made agreement that NGO will perform some cultural,Drama & education activity in our company 's Creche.as per agreement we will reimburse whatever the expenses or cost will rise during perform this activities. agreement value is more then 1,50,000.

now please guide me is there any tds liability while making payment to NGO.
and what is deduction Rate 194J or 194C.

Regards

Ravinder

Jitender

Jitender (Expert)
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31 August 2010 There is no professional work is being performed ,therefore, no TDS is applicable u/s 194J and there is no work contract is being executed either, therefore, no tds u/s 194 C is applicable.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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01 September 2010 There is no involvement of TDS under 194J, But so far as TDS under section 194C is concerned, In my opinion, TDS will be applicable as its a complete contract of organising an event.

Further, if a separate bill for reimbursement of out of pocket is received, then TDS will be deductible only on the main bill for the function. But if a combined bill is recd for the whole amount , then TDS will apply on the whole amount.

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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01 September 2010 I would like to see some more experts opinion on this, hence keeping the query.....OPEN

Aditya Maheshwari

Aditya Maheshwari (Expert)
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01 September 2010 - In the case of sponsorship for debates, seminars and other functions held in colleges, schools and associations with a view to earn publicity through display of banners, etc., put up by the organisers, the agreement of sponsorship is in essence an agreement for carrying out a work of advertisement. Therefore, provisions of section 194C will apply.
organisations—Circular No. 715, dated 8-8-1995.