Applicability of TDS u/s 194C for a lecturer on German Language

[MAHESH MATHUR]

A) Can a payment of a Honorarium to a lecturer on Foreign Language be covered for TDS u/s  194C or 194B) Can a payment to an institution for deputing a teacher for German language can be covered by the said section Kindly refer to the following judgements: 1. Bombay Goods Transport Association V/s CBDT 210 ITR 136 (Bom)/(1994) 2. All Gujrat Federation Tax Consultants v/s CBDT (1995 (3) TMI 84 - GUJARAT High Court)= 214 ITR 276 /280 (1995) Taxmann Guj HC 3. SRF Finance Ltd. V/s CBDT (1994 (9) TMI 59 - DELHI High Court) 4. Andhra Pradesh tax Bar Association V/s CBDT (1994)118 CTR A.P. 281. section 194C is applicable only to payments made to any person for any work and not the payments made as fee for services rendered. - As per judgement in SRS Finance Ltd. V/s CBDT (1994 (9) TMI 59 - DELHI High Court)

[Sankar Bagchi]

Honorarium paid to a lecturer on Foreign Language not covered for TDS u/s 194. TDS on professional services is covered u/s 194J(1)(d)with respect to education services rendered to potewntial user in connection with business of industrial or commercial nature.

[manoj gupta]

Honourarium paid to a lecturer is covered under section 194J (TDS on professional services)for deduction of TDS and not under section 194C.

[DEV KUMAR KOTHARI]

strictly speaking honorarium cannot be called 'fees' or 'remuneration' for professional services. However, in view of dis-allowance in case of failure to deduct tax,to avoid disputes on front of TDS default and dis allowance it is advisable to deduct tax u/s 194 J. There is no harm in TDS- one can save liability of interest for delay in payment of advance tax installments. You can also search and refer to some other issues on the subject honorarium vis a vis professional fees found in discussion forum.

AI Summary

TDS on professional services: treat lecturer honoraria as fee based payments and consider withholding to avoid disallowance. Honoraria to a foreign language lecturer do not ordinarily qualify as payments for contract work and thus are not subject to contract work withholding; instead, where the payment effectively compensates for professional or educational services provided to a user, the applicable withholding is under the professional/fee TDS provision, and taxpayers often deduct under that head to avoid disallowance or interest for failure to withhold.