Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Tds query

swohra (none) (537 Points)

16 March 2011

Dear Members

Whether payment made by an advertising agency to a media (electronic or print) covered under tds provisions or not?

Thanks in advance..

Reply
Follow
Share

10 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 16 March 2011

yes it covers under section 194C.

Upgrade to CAclubindia Pro. Subscribe Now!

swohra (none) (537 Points)
Replied 16 March 2011

Thanks Pankaj Ji

But under 194C the payment made by a person to an advertising agency is covered.

CA Navin Jain (MANAGER (FINANCE & ACCOUNTS)) (11768 Points)
Replied 16 March 2011

yes, tds will be applicable @ 2% UNDER SEC 194C

swohra (none) (537 Points)
Replied 16 March 2011

Thanks Navin sir,

But Sir the transaction is in between advertisement agency and media not in any person and advertisement agency.

CA Navin Jain (MANAGER (FINANCE & ACCOUNTS)) (11768 Points)
Replied 16 March 2011

i think adv agency will pay the amt to media

Upgrade to CAclubindia Pro. Subscribe Now!

Athmaram (Articled Assistant) (170 Points)
Replied 16 March 2011

Dear All,

Payment made to media by an advertising agency is not subject to TDS but TDS is payable when the assesse makes payment to the advertising agency....

Hence advertising agency is not responsible for deducting TDS

Circular No. 717,dated August 14, 1995.

Regards

Ram.

swohra (none) (537 Points)
Replied 16 March 2011

Will it be covered by any other provision of TDS or not?

swohra (none) (537 Points)
Replied 16 March 2011

Will it be covered by any other provision of TDS or not?

Athmaram (Articled Assistant) (170 Points)
Replied 16 March 2011

No it will not be covered under any TDS provisions.

Thanks & Regards

Ram

(Guest)

Finance Act, 1995

47.2 In order to subject payments in respect of advertising contracts, broadcasting contracts, telecasting contracts, transport contracts and catering contracts to the requirement of deduction of income-tax at source, the Act amends section 194C by providing that the expression ‘work’, used therein, shall also include (a) advertising, (b) broadcasting and telecasting including production of programmes for such broadcasting or telecasting, (c) carriage of goods and passengers by any mode of transport other than by railways, and (d) catering. While the deduction of tax shall be at the rate of two per cent of the amount in regard to items (b), (c) and (d) above, it shall be at the rate of one per cent in the case of an advertising contract. The deduction in regard to item at (a) above shall apply when a client (i.e., an advertiser) makes payment to an advertising agent. When an advertising agency makes payments to their models, artists, photographers, etc., tax shall be deducted by it under section 194J of the Income-tax Act at the rate of five per cent as applicable to fees for professional and technical services. There will, however, be no tax deduction at source when an advertising agent makes payment to the print or electronic media.