Dear Sandeep,
Naukri.com represent Info edge (India) Ltd. which is resident in India and section 195 does not apply to it. Further, I understand that subscripttion charges delivers you benifit to excessing the information which otherwise not allowed to others (non member). I think (not sure) the profession of naukri.com is not considered as profession of Information Technology as this profession is brought into scope of section 194J vide Notification : No. SO 385(E), dated 4-5-2001.
On above understanding, In my opinion TDS shall not be attracted under section 194J or 194C if payment is made as/for subscripttion charges.
To be on conservative side you may opt to deduct tax under section 194J @ 10%, but its still open for member to discuss whether subscripttion charges paid by Mr. Sandeep to naukri.com shall amount to professional services of information technology?
For your informaion provisions of Section 194J is produced below;
(1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of—
(a) fees for professional services, or
(
b) fees for technical services,
4[or]
(
d) any sum referred to in clause (
va) of
section 28,]
shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to 5[ten] per cent of such sum as income-tax on income comprised therein :
Explanation.—For the purposes of this section,—
(
a) “professional services” means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified
10a by the Board for the purposes of
section 44AA or of this section;
Section 44AA
Accounts, Maintenance of, by professionals
Notified professions : (a) The profession of authorised representative; and (b) the profession of film artist (actor, cameraman, director, music director, art director, dance director, editor, singer, lyricist, story writer, screen play writer, dialogue writer and dress designer)—Notification : No. SO 17(E), dated 12-1-1977/Profession of Company Secretary—Notification : No. SO 2675, dated 25-9-1992/Profession of Information Technology—Notification : No. SO 385(E), dated 4-5-2001.
(b) “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9;
For the purposes of this clause, “fees for technical services” means any consideration (including any lump sum consi-deration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction80, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head “Salaries”.]
11[(
ba) “royalty” shall have the same meaning as in
Explanation 2 to clause (
vi) of sub-section (1) of
section 9;]
[For the purposes of this clause, “royalty” means consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head “Capital gains”) for—
(i) the transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property ;
(ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property ;
(iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property ;
(iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill ;
76[(iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB;]
(v) the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films ; or
(vi) the rendering of any services in connection with the activities referred to in sub-clauses (i) to 76[(iv), (iva) and](v).]
Clarifications on payments to certain institutions/agencies - The following clarifications are issued by Circular : No. 715, dated 8-8-1995.:
- Payments to recruitment agencies are in the nature of payments for services rendered, and hence will be subject to TDS under section 194J of the Act, and not under section 194C of the Act.
Thanks
CAclubindia
