Special Festive Offer: 10% OFF Across All CCI Pro Membership Plans. Subscribe Now!

TDS for a payment to a professional

394 views

Save Share

Vivek Kaushik

25 Points Posted on 12 December 2021

I have been taking the services of a professional for 5 months. We had agreed to a payment of Rs 10,000 per month. So, first 3 months I didn't deduct any TDS as the total amount paid was less than Rs 30,000 but from the 4th month onwards, I started paying Rs 9,000 only deducting 10% as TDS.

So in the 4th and 5th months, I deducted TDS. Is it the right thing I did?

Or should I have deducted tax for all the 5 months?

Replies (3)

Quick Summary

This discussion clarifies the rules around deducting Tax Deducted at Source (TDS) on payments made to professionals. It addresses whether TDS should be deducted on each payment or only when the cumulative amount exceeds the threshold. The consensus is that TDS should ideally be deducted on every payment, particularly if the nature of the contract suggests ongoing services, even if individual payments are below the limit.

CA Raj Doshi

Practising CA

5649 Points Posted on 12 December 2021

In the 4th installment deduct for the first three as well

sabyasachi mukherjee

Profession

19978 Points Posted on 12 December 2021

Sec 194 J says booking of bills or payment of bills whichever is earlier.
It's advisable to deduct tds on every payment. In case the nature of contract is one time and less than threshold limit, you may not deduct tds.