DEAr friends
We are doing business of developing software & providing software services .we have taken SMS facility from one party ( they charged service tax from us) and give promotional SMS service to our clients. Whether we have to deduct TDS before making payment to that party ? IF yes under which head ? kindly help us
The issue appears to be not free from doubt. In my view, sending of sms is a service and not goods. Now if it is a service, would you deduct TDS under 194J or 194C. That is another mind boggling question.
Wait for further views.
Regards,
It may be classified as Professional Service u/s 194J as well as Contracted Service u/s 194C. But I 'll recommend you to play safe and deduct TDS @ higher rate i.e. 10% u/s 194J to nullify any dissallowance by the IT department.
Can the learned Friends further discuss on this please ?
Rgards,
CAclubindia
