TaxTMI 
TaxTMI 
Whether an amount charged on profits made by managing portfolio of an individual will be referred to as professional services or commission/brokerage for the purpose of TDS deduction?
TDS applicability- 194H or 194J
04 Oct 2023 
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TDS on portfolio management fees: classification determines applicability, assess facts before deciding on tax deduction.
Portfolio management fees may not qualify as commission or brokerage because the commission definition excludes securities-related transactions; tribunals have similarly questioned applicability of routine professional-fee provisions to such fees. Determination is fact-sensitive: tribunal decisions can support non-deduction but a conservative approach treats these receipts as technical/professional fees and recommends TDS deduction unless facts indicate otherwise. (AI Summary)
Portfolio management fees may not qualify as commission or brokerage because the commission definition excludes securities-related transactions; tribunals have similarly questioned applicability of routine professional-fee provisions to such fees. Determination is fact-sensitive: tribunal decisions can support non-deduction but a conservative approach treats these receipts as technical/professional fees and recommends TDS deduction unless facts indicate otherwise. (AI Summary)