RamaKrishnan (Sr. Officer- Accounts & Audit) (123 Points)
27 February 2010Expert's Advise Pl.
A labour met with an accident and hospitalized. The company incurrs all Medical exp. such as Surgery, Consultancy fee, Room charges, pharmacy etc... which cost to company around Rs. 10 Lakhs.
Is it liable to deduct Tax by the company to the Hospitals (Pvt Ltd)?
-RAM
Chintan Shah
(-)
(534 Points)
Replied 27 February 2010
Dear Friend,
The services rendered by the hospital is in the nature of professional services being services rendered in course of medical profession as defined under Explanation to Section 194J and hence TDS would be deductible u/s 194J at the rate of 10 % plus surcharge plus EC.
Regards
Chintan
Amir
(Learner)
(4016 Points)
Replied 27 February 2010
Dear Ramakrishnan,
Agree with friend Chintan that if company directly pays it to the hospital then TDS u/s 194 J shall be deducted on payment..........
Just want to add if the Hospital doesnot fall wihin any of the clauses as specified u/s 17(2) which defined perquisites, then amount in excess of Rs. 15,000 will be taxable as perquisite & TDS shall also be deposited on this amount in excess of 15000.....
If Co has reimbused the amount to employee then also the above taxability of perquisites needs to be examined...
Chintan Shah
(-)
(534 Points)
Replied 27 February 2010
Hi Amir,
you are quite correct about the taxability of perquisites....
I cant understand why TDS will be deposited on the amount in excess of 15000. Because Section 194J states that the TDS has to be deducted on the income component (gross payment - taxes, etc.) of the payment made for professional services. Pls do clarify the same...
Thx and regards
Chintan
Amir
(Learner)
(4016 Points)
Replied 27 February 2010
Dear Chintan,
Bhai limit of 15k is applicable in case of perquisite & not in case of payment to hospital..........
U r rite on payment made to hospital TDS will be deducted on the entire amount.
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