20 January 2022
A charitable religious trust contracts with broadcasting agency for live telecasting of "katha" ? Is tds required to be deducted on payments made by trust to such agency ? since such contract does not amount to works contract ? Or is it required to deduct tax ?
11 July 2024
In the scenario where a charitable religious trust contracts with a broadcasting agency for live telecasting of "katha," the question of whether TDS (Tax Deducted at Source) needs to be deducted depends on the nature of the payment and the applicability of TDS provisions under the Income Tax Act, 1961.
### Analysis:
1. **Nature of Payment:** - The payment made by the charitable religious trust to the broadcasting agency would typically fall under the category of "fees for technical services" (FTS) as defined under Section 194J of the Income Tax Act.
2. **Section 194J - Fees for Technical Services:** - Section 194J requires TDS to be deducted at the rate of 10% on payments made for professional or technical services. This includes any consideration for rendering of any managerial, technical, consultancy services, or fees for professional services. - The term "technical services" is broadly defined and includes any consideration for the rendering of any managerial, technical, or consultancy services.
3. **Application to Broadcasting Services:** - Broadcasting services provided by a broadcasting agency typically involve technical expertise and services related to the transmission and telecasting of content, which can be considered as technical services under Section 194J.
4. **Works Contract vs. Fees for Technical Services:** - Works contract typically involves a contract for carrying out construction, erection, installation, etc., which is covered under a different section for TDS deduction (Section 194C). - Since the contract for live telecasting of "katha" with a broadcasting agency does not fall under the definition of works contract but rather involves technical services, TDS would be applicable under Section 194J.
### Conclusion:
Given the above analysis, **yes, TDS is required to be deducted** by the charitable religious trust on payments made to the broadcasting agency for live telecasting of "katha." The applicable section for TDS deduction in this case would be Section 194J, at the rate of 10%.
- **Procedure:** Ensure that TDS is deducted at the time of credit or payment, whichever is earlier, and the trust complies with other TDS procedural requirements such as timely deposit of TDS, filing TDS returns, and issuing TDS certificates.
- **Consultation:** For precise applicability and compliance with TDS provisions, it's advisable to consult with a tax advisor or chartered accountant familiar with TDS regulations pertaining to payments for technical services in the context of charitable trusts. They can provide specific guidance tailored to your trust's situation and ensure compliance with tax laws.
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