DEAR Experts,
Under a contract, following services are provided by a a professional consultancy firm 'A':
A) Supply of 2 full time Consultants to a Client who shall be located at client premises at all times however be on payroll of firm A. Client shall pay Cost to A plus 10% in exchange of such manpower supply.
B) Supply of offsite consultancy to the same client.
Under contract, separate consideration of both 2 works is specified. Whether it shall be permissible if client deducts TDS u/s 194C on manpower supply portion and TDS u/s 194J on offsite consultancy portion?
If yes, kindly refer to any precedent/judgment in support.
Determining TDS Applicability for Manpower Supply and Consultancy: Single or Separate Contracts Under Sections 194C & 194J? A discussion on a forum addresses whether a client can deduct Tax Deducted at Source (TDS) under Section 194C for manpower supply and Section 194J for offsite consultancy provided by a consultancy firm. The response suggests examining whether the contract is singular or consists of two independent contracts. If it is a single contract, the primary service will determine the applicable TDS section. If separate, each service's nature determines the TDS section. The reply emphasizes that merely having separate considerations or contracts does not automatically indicate separate contracts, and artificial bifurcation could be scrutinized by authorities. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
