services of security guard - professional or not??

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CA Abhishek Singh (Querist)
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17 September 2010 hello every one,

one of our client deducts tds on payment to owner of security services(security guards)at10% instead of deducting at 2%(payee is company) as he is a contractor.

accountant says that their services is of professioanl nature and therefore 10% rate.

plz. clarify, if possible provide me with case laws.

Thanks in advance.

Praveen Sharma

Praveen Sharma (Expert)
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18 September 2010 Hi Abhishek,

Security Charges is in the nature of Contract between the parties.

TDS shall be deducted u/s 194C @ 1%/2% depending upon the status of the payee.

Regards
P