Dear Experts,
Could you please advise on the applicability of TDS under the relevant section for the following transaction?
ABC Ltd. rents a digital copier cum printer from XYZ Ltd. The terms of the agreement are as follows:
Monthly rental fee: Rs 5000 per printer (includes 10,000 free A4 copies)
Additional copies: Rs 0.75 per copy for any prints beyond the free allowance
For the month of March 2025, ABC Ltd. uses the printer to print 20,000 A4 sheets.
Please advise on the withholding tax (WHT) applicability under the relevant section, considering the following scenarios:
a) If a single invoice is raised for the entire transaction.
b) If two separate invoices are issued—one for the rental charges and another for the printer usage charges.
Kind regards,
S Ram
Printer Rental Payments: Section 194-I vs. 194C vs. 194J - Which TDS Rate Applies When Exceeding Copy Limits? The query concerns TDS applicability on printer rental charges where ABC Ltd. rents a digital copier from XYZ Ltd. for Rs. 5,000 monthly (including 10,000 free copies) with additional copies charged at Rs. 0.75 each. For March 2025, with 20,000 copies used, experts provided differing opinions on applicable TDS sections. One expert suggested Section 194-I (2% TDS) for rental and Section 194J (10% TDS) for additional copies, explaining the distinction between professional services and contractual work. Another expert recommended applying Section 194C or 194-I at 2% rate for the entire transaction, suggesting a single invoice with 2% TDS under 194C as the simpler approach since rates would be the same. (AI Summary)
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