TDS on sponsorship

[Guest]

Our company paying sponsorship payment to an association. Whether tds is applicable u/s 194C or not?

Similarly we are participating in exhibition etc. The payment of participation fee is also liable for tds u/s 194C. pl. clarify.

[Ganeshan Kalyani]

Sponsorship is an activity which is in the nature of Advertisement and therefore, TDS is required to be deducted under section 194C.

Participation fee is not for any service to be received. It is just a kind of permission sought to participate in the exhibition and therefore in my view TDS should not be deductible in this case.

AI Summary

TDS Deduction Required for Sponsorship Payments under Section 194C; No TDS on Participation Fees for Exhibitions. A company inquired about the applicability of TDS under section 194C for sponsorship payments to an association and participation fees for exhibitions. The response clarified that sponsorship payments are considered an advertisement activity and thus require TDS deduction under section 194C. However, participation fees are viewed as a permission to participate rather than a service, and therefore, TDS should not be deducted for these payments.