TDS Query!!!! plz help

rahul sharma (Student) (64 Points)

17 January 2011  

Dear Members

My query is

Mr. X (a non-resident) having a Sole proprietorship firm (X & CO.) in India, Mr. X is a professional artist providing services to ABC Pvt Ltd. through various stage performances in their theater.

There is a contract between ABC Pvt Ltd. and X & CO. that on every Show ,ABC Pvt Ltd. will pay a fixed amount of Rs.2 lacs + 30% of profit* from the each Show.

*Profit is to be calculated by deducting particular expenses from the total income per show.

ABC Pvt Ltd. is deducting TDS @ 1% on such payments by saying that it is a contract which is covered under the provisions of Section 194C (TDS on Contracts).

My question is whether ABC Pvt Ltd. would deduct TDS @ 10% (TDS on Professional Services) as it is seemed that the above service is covered under the provisions of Sec194J.

Please solve my query and also quote any case law regarding this.

 

Thanks and Regards

Rahul