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TDS ON Professional Fee (194J)
In some cases of Advance party payment in April'07 , we have deducted TDS on Professional fee on advance basis at existing prevailing rate @ 5% but when advance has being adjusted on June onwards after invoices come then the current exicsting rate has been increased (i.e @ 10%), IS again TDS deduction liability would occur on Advance amount at partial rate of increament(i.e @ 5%)?
Replies (4)
The change in the rate is applicable for payments made prior and after 01.06.2007. Thus in your case balance amount payable whould be taxed at 10%.
on & after 1/6/2007 rate of TDS is @ 10% + cess. so the bills are to be paid by deducting TDS @ 10%+. Now add 5%+ to all bills of june & onwards,
above sugesttion is correct.
TDS IS TO BE DEDUCTED ON AMOUNT PAID OR CREDITED WHICH EVER IS EARLIER. HENCE IN YOUR CASE SINCE YOU HAVE PAID AMOUNT BEFORE ENACTMENT @ 5 @ ITS CORRECT AND ON THE BALANCE YOU HAVE TO DEDUCT @ 10%
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