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TDS on Telephone Bills

Shrinaath Paravasthu (Articles) (62 Points)

24 January 2011

Can any one tell Whether Section of TDS (194 I) is applicable to Monthly rentals paid to private telecom operators for Broadband usage

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20 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 24 January 2011

No.. Tds u/s 194I not applicable

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Shrinaath Paravasthu (Articles) (62 Points)
Replied 24 January 2011

These private operators specifically mentions the charges as Monthly rentals and more over these transactions resemble rental payments in the sense that operators still remain the owners of what we use

If 194 I is not applicable , then what about 194 J - Technical services. Since all over India , there are only few operators . It must be so techinical that many people are not venturing into it and govt will also grant licenses only to persons having techincal knowledge of the field.

Pankaj Arora (Learner) (3134 Points)
Replied 24 January 2011

Buddy you can not deduct tds under section 194I or 194J.

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 24 January 2011

Defination OF RENT given under section 194 I is as follows :

the term rent means any payment under any lease, sub lease, tenancy or any other agreement or arrengment for the use of (either seperatly or together) any: a) Land b) factory building C)land appurtent to a building ( including factory building); Machinary e) Palnt f) equipments;g) furniture h)fittings, whether or not any or all of the above are owned by the payee .

Telephone or broadband services provided does not fall under above defination hence no liability to deduct TDS.

Regards

MS Kabra

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Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 24 January 2011

whereas TDS under section 194J is concern ....request you to refer Skycell communication Ltd. vs. DCIT (2001) 251 ITR 53

Regards

Kabra

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CA ABHISHEK (JOB) (82 Points)
Replied 24 January 2011

Nature of transaction is very important to see whether the services/rental is tax deductible or not, TDS should be deducted if the amount payable crosses exemption limit for non-deduction of the same.

M .K. Jha (CA Final) (484 Points)
Replied 24 January 2011

Originally posted by : CA ABHISHEK
	Nature of transaction is very important to see whether the services/rental is tax deductible or not, TDS should be deducted if the amount payable crosses exemption limit for non-deduction of the same.

ya he is right... it depend upon nature of transaction ...

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 24 January 2011

Originally posted by : M .K. Jha
	Originally posted by : CA ABHISHEK Nature of transaction is very important to see whether the services/rental is tax deductible or not, TDS should be deducted if the amount payable crosses exemption limit for non-deduction of the same. ya he is right... it depend upon nature of transaction ...

Here as per defination & relevent case laws ........it is completly excluded.........

Regards

Kabra

Shrinaath Paravasthu (Articles) (62 Points)
Replied 24 January 2011

Isn't data card an equipment

Madhusudan Kabra (knowledge seeker) (1779 Points)
Replied 24 January 2011

no doubt data card is an equipment but Internet Service provider (ISP) is not charging us rent for equipment but it is charging us for usage of internet.........also Once you pay for data card ...it became ur property ......so no question of rent on data card arise....

Regards

Kabra