As per 194J

TDS is to be deducted on Professional Technical Royalty Services Normally at 10%

However, in case of payment to call center, TDS Rate is 2%

 

However, No TDS is to be deducted if annual amount is upto 30000 per annum. If Amount is 30001 then TDS is deducted.

Section Description Cutoff Rate of TDS
194J Professional/Technical/Royalty/Non Compete Fees    
  Paid to Business Exclusively in Call Center Business 30000 2%
  Other Persons 30000 10%

 

Services covered

Example  

(1) Professional Services

CA service / Audit fees / Lawyer / CS / CWA

(2) Technical Service

Engineering Co / Technical inspection

(3) Royalty

Fees for patent / Copy right / Trademark

(4) Employees on contract doing white collared Job

Accountant / Salesman / Engineer hired directly or through agency

 

Question

Q1.

1.Bill from CA for Audit fees Rs 10000 per quarter

View Answer

 

Q2.

Bill from CA Professional Charges Rs 15000 per annum + Rs 2000 pm for Certificate Issue Charges

View Answer

 

Q3. 

Cash Sales made Rs 30 lacs 5% Royalty paid to AB Technologies for using its technologies

View Answer

 

TDS On Call Center

Example

Suppose a Mobile Company Vodafone hires the services of A Ltd. where A Ltd. will operate call center of Airtel at a cost of 1 lacs

  • Vodafone will deduct 10% TDS in this case and pay A ltd 90000 (Till 31 May,2017)
  • From 1 June 2017,2% TDS will be applicable. Vodafone will deduct 2% TDS in this case and pay A Ltd. 98000
  1. Tax Practical
  2. Practical TDS (Non Salary)

About the Author

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.