Tds rate for production of commercial ads

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shankar (Querist)
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14 November 2011 Please tell me the TDS rates for "Creation of commercial ads" Is it comes under 194C or 194J.

please give reference.

Rajnish Singh

Rajnish Singh (Expert)
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14 November 2011 under 194c

shankar

shankar (Querist)
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15 November 2011 Please tell me the TDS rates for "Creation of commercial ads" Is it comes under 194C or 194J.

please give reference.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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28 July 2025 Great question. The **TDS applicability** for **creation/production of commercial advertisements** has historically generated confusion between **Section 194C (contracts)** and **Section 194J (professional/technical services)**.

Let’s clarify it in detail, with references to law and circulars relevant to **FY 2011–12 (your query date: Nov 2011)**.

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## ✅ **TDS Applicability: Creation of Commercial Advertisements**

### 🧾 **Section 194C** – TDS on Contracts

* Applies to payments to a contractor for **carrying out any work**, including:

> “Advertising” (specifically mentioned in the Explanation to Sec 194C)

💡 So, **production of a commercial ad** (TV, print, radio) is considered as a **contractual work for advertisement**.

➡️ Therefore, **TDS under Section 194C** is applicable.

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## 🔖 Supporting Reference:

### 📘 **CBDT Circular No. 715, dated 8 August 1995**

This is a crucial reference.

#### Q.1: Whether TDS is required to be deducted under section 194C or 194J for advertising contracts?

**A:**

> **Payment for advertising** is subject to **TDS under Section 194C**.

#### Q.2: Whether the payment made to a film producer or production house for production of a film/documentary/advertisement film attracts TDS under section 194C?

**A:**

> Yes, since it's a **contract for work**, TDS applies **u/s 194C**.

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## 🧾 Section 194J – Why it **does not** apply

* Section 194J is for **professional services**, like:

* Legal
* Medical
* Engineering
* Architectural
* Accountancy
* Technical consultancy
* While advertising agencies **may employ creative professionals**, the **contract is with the agency**, not individual professionals.

🔹 Hence, **no TDS u/s 194J** unless you're paying **an individual professional (e.g. an artist, photographer, designer)** directly for their creative input — in that case, **194J** may apply.

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## ✅ **TDS Rate for FY 2011–12 (as of Nov 2011)**

| Section | Nature | TDS Rate |
| -------- | ---------------------------------------------------------- | ---------------------------------------- |
| **194C** | Payment to contractor for advertising | **1%** (individual/HUF), **2%** (others) |
| **194J** | Payment to advertising professionals directly (rare cases) | **10%** |

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## ✅ Final Answer:

* **TDS for creation of commercial ads is covered under Section 194C**
* **Rate:**

* 2% if paid to company/firm
* 1% if paid to individual/HUF
* **Reference:** CBDT Circular No. 715, Q1 & Q2
* **Only in rare cases of direct payment to a creative professional, Sec 194J @ 10% applies**

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Let me know if you’d like a case law or sample invoice TDS treatment.

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