TDS on legal services ?

TDS / TCS 7427 views 5 replies

'X' (a pvt ltd co.) is fighting a case against a multi locational company.

'X' has appointed 'A' (a legal firm) for this case. 

In this connection, a case has to be filed in Malayasia against a Malaysian company. 

'A' is providing legal consultancy to 'X' in India. Further, in the above Malaysian complaint, "B" has provided legal consultancy for which "A" has paid "B" total charges (including consultancy, stationery, communication etc).

Now, 'A' has raised a debit note on 'X' for the above payments made to 'B'.

What is the TDS liability of 'X' in settling the debit note of "A" ?

Replies (5)

Treatment of TDS is same as for Professionals u/s194J @ 10%.

Assuming A is a resident firm tds shud b deducted u/s 194J otherwise u/s 195(i.e. if A is Non resident) 

Dear Sir,

Agree with Miss Jyoti

In your case the service is being rendered by an Indian Company and it comes under the purview of Section 194J @ 10%

It is none of your concern to whom A is paying, Since you are going to make the payment to A therefore the above stated TDS rate would be applicable.

Since X has to make payment to A only,it is attracting 194J @ 10%

Dear  Mr Subhash,

 

The Main Question should be whether Legal  firm A is liable to Deduct tax when remitting the monies to Malaysian Legal Firm B. When A paid the total charges to B, whether it deducted, or was liable to deduct tax u/s 195. ??? A similar situation arises when an Indian Company raises funds overseas. it has to comply with a lot of local legal requirements abroad, and for this it is charged fees by the Foreign Law Firm. Will the Indian Company/ Indian Legal Counsel deduct tax when remitting the fees. Services are all rendered abroad ???


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