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Monthly Payment for Internet Leased Line

27 November 2008

My client is paying a fixed sum towards internet leased line on monthly basis. The sum exceeds prescribed amount u/s. 194C. Should tax be deducted? If it is so, then such services are covered under 194C or 194J?

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3 Replies

CA Hemant T Dewani (Chartered Accountant) (3356 Points)
Replied 27 November 2008

tds is not deducted on internet & telephone bill there is no provison in the income tax for deduction of tax

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CA Yasaswy Sarma Veluri (Chartered Accountant) (605 Points)
Replied 27 November 2008

Originally posted by :CA Hemant T Dewani
"	tds is not deducted on internet & telephone bill there is no provison in the income tax for deduction of tax	"

Sec 194 J Fees for Professional or Technical Services or Royalty or Non Compete Fee

a. Any person paying

1. Fes for Professional services

"Professional Services" means Services rendred by a person in ocurse of carrying on legal, engineering, or architectural profession or th profesion of accountancy or technical consultancy or interior decoration or advertising or information technology or other such profesion as is notified by board for purposes of sec.44AA or of this section.

Internet Doesnt Fall under the Information Technology or Technical Consultancy as it inculdes only softwares and Training Etc..

It also wont come under 194C as there is no specific Contract..

There is no Need to Deduct TDS for Interent under Any Sec.

Bala (CFO, Cogzidel) (59 Points)
Replied 27 November 2008

Hi,

"Internet connection" falls under "Technical Service" and hence, tax under section 194J has to be deducted at source. This has been confirmed by many practicising CAs.

Tax has to be deducted irrespective of the service provider, be it VSNL, Bharti or others.

Regards

Bala

www.cogzidel.in