Tds u/s 194 c
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
27 August 2011
supply of advertisement material like hoardings, flexes etc are covered u/s 194C?
27 August 2011
No as per the recent circular material issued after charging VAT will not be liable for TDS
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Querist : Anonymous
Querist :
Anonymous
(Querist)
27 August 2011
can u give me the details of the circular?
27 August 2011
the term “advertising” used in section 194C(1), where tax deduction at source has to be made at the rate of 1 per cent It is clarified that advertising may be in print or electronic media, i.e., in newspapers, periodicals, radio, television, etc. In such cases the tax will be deducted at the rate of 1 per cent of the payment made for advertising including production of programmes for such broadcasting and telecasting to be used in such advertising. In all other cases of work of broadcasting and telecasting including production of programmes for such broadcasting and telecasting, where advertising is not involved, tax will be deducted at the rate of 2 per cent of the sum.
27 August 2011
Read more: http://www.taxalertindia.com/2009/11/tds-on-job-work-new-circular.html#ixzz1WFC7AqLH
Under Creative Commons License: Attribution
Amendments in section 194C from 01.10.2009:As per amendment through Finance Act(2) ,2009,new Section 194C has been substituted for old section 194C .New Section is applicable from the 01.10.2009.The main changes in the new section is given as under
1. Separate rates for contractor and subcontractor have been removed. Now the tax rate has been categorized according the status of deducted and new TDS rates for contractors are as under
o For payment made to Individual & Hindu undivided family=1 %
o For payment to others =2%
2. Confessional rate of 1 % for advertisement Contracts has been removed and now rates as defined under (1) above is applicable on all type of contractor including Advertisement contracts.
3. No TDS on payment to transport operator (i.e. in the business of playing, hiring or leasing goods carriage), if he/it furnishes his PAN to payer.
4. No surcharge and cess applicable on basic TDS rate in FY 2009-10 on payments made to resident except salary
5. Basic limit of 20000 and 50000 per annum remains unchanged.
6. No tds in case of payment of Job work, if raw material has not been supplied by the payer.
Under Creative Commons License: Attribution
Amendments in section 194C from 01.10.2009:As per amendment through Finance Act(2) ,2009,new Section 194C has been substituted for old section 194C .New Section is applicable from the 01.10.2009.The main changes in the new section is given as under
1. Separate rates for contractor and subcontractor have been removed. Now the tax rate has been categorized according the status of deducted and new TDS rates for contractors are as under
o For payment made to Individual & Hindu undivided family=1 %
o For payment to others =2%
2. Confessional rate of 1 % for advertisement Contracts has been removed and now rates as defined under (1) above is applicable on all type of contractor including Advertisement contracts.
3. No TDS on payment to transport operator (i.e. in the business of playing, hiring or leasing goods carriage), if he/it furnishes his PAN to payer.
4. No surcharge and cess applicable on basic TDS rate in FY 2009-10 on payments made to resident except salary
5. Basic limit of 20000 and 50000 per annum remains unchanged.
6. No tds in case of payment of Job work, if raw material has not been supplied by the payer.
27 August 2011
Clarifications on advertising contracts - The following clarifications need be noted :
As to the scope of an advertising contract for the purpose of section 194C, the term ‘advertising’ has not been defined in the Act. During the course of consideration of the Finance Bill, 1995, the Finance Minister clarified on the floor of the House that the amended provisions of tax deduction at source would apply when a client makes payment to an advertising agency and not when advertising agency makes payment to the media, which includes both print and electronic media. The deduction is re quired to be made at the rate of 1 per cent. When an advertising agency makes payments to their models, artists, photographers, etc., the tax shall be deducted at the rate of 5 per cent as applicable to fees for professional and technical services under section 194J of the Act.
If the advertising agencies give a consolidated bill including charges for art work and other related jobs as well as payments made by them to media, the deduction will have to be made under section 194C at the rate of 1 per cent. The advertising agencies shall have to deduct tax at source at the rate of 5 per cent under section 194J while making payments to artists, actors, models, etc. If payments are made for production of programmes for the purpose of broadcasting and telecasting, these payments will be subject to TDS at 2 per cent. Even if the production of such programmes is for the purpose of preparing advertisement material, not for immediate advertising, the payment will be subject to TDS at the rate of 2 per cent.
The payments made directly to print and electronic media would be covered under section 194C as these are in the nature of payments for purpose of advertising. Deduction will have to be made at the rate of 1 per cent. However, the payments made di rectly to Doordarshan may not be subjected to TDS as Doordarshan, being a Government agency, is not liable to income-tax.
The contract for putting up a hoarding is in the nature of advertising contract and provisions of section 194C would be applicable. However, if a person has taken a particular space on rent and thereafter sublets the same fully or in part for putting up a hoarding, he would be liable to TDS under section 194-I and not under section 194C. In the case of advertising contracts, tax is to be deducted at the rate of 1 per cent of the gross amount of the bill (including bill of media), and not on that portion of commission paid to the person who arranges release of advertisement, etc.(from 01.10.2009 rate on advertisement contract is 1% if payment to HUF or individual in other case rates are 2 %)
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 agree ment for carrying out a work of advertisement. Therefore, provi sions of section 194C will apply.
Tax is deductible at source on payments for costs of advertise ments issued in the souvenirs brought out by various organisations—Circular No. 715, dated 8-8-1995.
Read more: TDS ON CONTRACTOR- 194C CIRCULARS OLD REFERENCE | SIMPLE TAX INDIA-ITR FORM -TDS RATE 11-12
As to the scope of an advertising contract for the purpose of section 194C, the term ‘advertising’ has not been defined in the Act. During the course of consideration of the Finance Bill, 1995, the Finance Minister clarified on the floor of the House that the amended provisions of tax deduction at source would apply when a client makes payment to an advertising agency and not when advertising agency makes payment to the media, which includes both print and electronic media. The deduction is re quired to be made at the rate of 1 per cent. When an advertising agency makes payments to their models, artists, photographers, etc., the tax shall be deducted at the rate of 5 per cent as applicable to fees for professional and technical services under section 194J of the Act.
If the advertising agencies give a consolidated bill including charges for art work and other related jobs as well as payments made by them to media, the deduction will have to be made under section 194C at the rate of 1 per cent. The advertising agencies shall have to deduct tax at source at the rate of 5 per cent under section 194J while making payments to artists, actors, models, etc. If payments are made for production of programmes for the purpose of broadcasting and telecasting, these payments will be subject to TDS at 2 per cent. Even if the production of such programmes is for the purpose of preparing advertisement material, not for immediate advertising, the payment will be subject to TDS at the rate of 2 per cent.
The payments made directly to print and electronic media would be covered under section 194C as these are in the nature of payments for purpose of advertising. Deduction will have to be made at the rate of 1 per cent. However, the payments made di rectly to Doordarshan may not be subjected to TDS as Doordarshan, being a Government agency, is not liable to income-tax.
The contract for putting up a hoarding is in the nature of advertising contract and provisions of section 194C would be applicable. However, if a person has taken a particular space on rent and thereafter sublets the same fully or in part for putting up a hoarding, he would be liable to TDS under section 194-I and not under section 194C. In the case of advertising contracts, tax is to be deducted at the rate of 1 per cent of the gross amount of the bill (including bill of media), and not on that portion of commission paid to the person who arranges release of advertisement, etc.(from 01.10.2009 rate on advertisement contract is 1% if payment to HUF or individual in other case rates are 2 %)
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 agree ment for carrying out a work of advertisement. Therefore, provi sions of section 194C will apply.
Tax is deductible at source on payments for costs of advertise ments issued in the souvenirs brought out by various organisations—Circular No. 715, dated 8-8-1995.
Read more: TDS ON CONTRACTOR- 194C CIRCULARS OLD REFERENCE | SIMPLE TAX INDIA-ITR FORM -TDS RATE 11-12
27 August 2011
The issue may be viewed on the basis of the definition of 'work' given in the substituted section 194C came into effect from 1/10/2009. The circular referred above has become redundant since it has been issued based on the pre substitued section. Now coming to the issue -
1) If material required for making the flex, hordings etc are purchased by the supplier from the customer, section 194C attracts.
2) On the other hand ,if material required are purchased from a person other than the customer,the activity does not fit in the definition of 'work' and hence 194C does not attract.
1) If material required for making the flex, hordings etc are purchased by the supplier from the customer, section 194C attracts.
2) On the other hand ,if material required are purchased from a person other than the customer,the activity does not fit in the definition of 'work' and hence 194C does not attract.
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