TDS Query

[Suresh Singhal]

Dear members,

 

Reliance /BSNL is providing leaselines to the company for internet or for ERP connectivity. So we were deducting 2% TDS under the contactors-194 C . Now the AO(TDS)has issued us additional demand saying it should be under 194 I. Is there any judgment relates to it?.

 

Can you please guide me what should be ?

 

Thanks and best regards,

 

CA Suresh Kumar

[Bikash Bogi]

Dear Singhal Ji

There is no direct case law on this issue till date so far as my knowledge is concerned. Prima facie seems like that tax should be deducted u/s 194C of the Act. You can get some refrence from the case deciison of Kurukshetra Darpens (p) Ltd 169 Taxman 344.

 

Contrary view may be expected from group members.

 

As the issue is controversial one, one question may be asked from ITO (TDS) that at what percentage they are deducting tax when payment made to telecom company for Internet connections. There is very bright chances for deduction of tax u/s 194C. An RTI application in this regard will also be a good measure.....

 

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Regards

Bikash Bogi (Partner)  

+91-9930934403

 

SBR & CO. CHARTERED ACCOUNTANTS 

MUMBAI  I  SURAT 

 

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