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Tds on allowances paid to the employee of a sister company

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16 August 2012 Sir,

Under which section TDS need to be deducted if a company pays Rs.10,000/- pm to a skilled employee of a sister company for services rendered. There is no employer employee relationship and no contract in between them.

Advance Thanks for your opinion.

Regards,

Manikandan.A.V

16 August 2012 If there is no employee & employer relationship, then same will be treated as Professional fee/Consulting fee.


TDS to be made u/s 194J.

17 August 2012 Thanks ACA Guru M,

More opinions invited..


17 August 2012 I agree with Guru.. it wont fall under 194C and there is no contractor-contractee relationship. Further, specific provision overrides general provision.

Since you mentioned that the employee is the skilled labour, assuming that he is rendering technical / professional services, it clearly falls under 194J.



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