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I am individual with business income, do I need to deduct income tax for consultants?

30 January 2022

I am a salaried individual with business income and have to pay a professional 20,000 Rs for some software related services. Do I need to deduct income tax when paying for professional/consultant services online?

Is there a limit on the amount above which the tax is to be deducted and at what percentage? If anyone can share a link to an article on steps on how to do it would be very helpful. Thank you.

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8 Replies

rama krishnan (12234 Points)
Replied 30 January 2022

If your turnover is more than 1 crores during the f. y. 2020-21, then you are liable to deduct TDS on professional services at the rate of 10% if the aggregate payments exceeds 30000 in a year

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sabyasachi mukherjee (27117 Points)
Replied 31 January 2022

There are two opinions:
1 is your gross total income exceeding the basic threshold.
2. is your tds deducted out of professional services much higher .In that case tds is deducted.If you want to claim that tds .
its good
3. If you want to take business loan.Then it's OK.

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 31 January 2022

If tax audit is applicable then you have to comply with Tds provisions .If it is one time payment of 20000/- then it is not required even if the tax audit is applicable.

Kindly confirm whether you are carrying business / Profession & Turnover ?

sabyasachi mukherjee (27117 Points)
Replied 31 January 2022

Here the querist has not mentioned.
So the question of tax audit stands irrelevant.
You are requested to adhere to Sec 194C.

Nidhi (Chief Accountant) (3150 Points)
Replied 31 January 2022

If u r filing return under presumptive taxation, than there is non need of same.

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rd sharma (partner) (118 Points)
Replied 31 January 2022

TDS liability arises on a business person, if in the last financial year, his business accounts has been subject to tax audit under section 44. Other wise, he is not liable to withhold tds.

Eswar Reddy S (CFO- at NHTF) (58263 Points)
Replied 31 January 2022

@ Vikram Gupta

Kindly give details of turnover.

If it is small business / profession then there is no requirement to deduct tax on consultants payment even if it is above 30k.

Tds provisions are applicable only to tax audit entities.