difference b/w 194C AND 194J

[Sunil Agarwal]

WHAT IS THE CRITERIA TO DECIDE THAT WHETHER ANY SERVICE RENDERED TECHNICAL IN NATURE WILL FALL UNDER 194C OR 194J

[CAGOPALJI AGRAWAL]

Section 194C is not applicable on service contracts. Fees for technical services will have the same meaning as defined under section 9(1)(vii) explanation 2. If you go through it, it would be clear that when any service in the nature of managerial, technical or consultancy is rendered, it will be come under section 194J. Section 194C contracts are done which come under business category not the profession. By reading the meaning of profession, more practical view may be derived.

[Sucheta Agrawal]

Dear Mr. Sunil,

As per my views section 194C relate to payment to contractors while 194J relate to fee for professional or technical servies. Thus according to section 194C "Technical in nature" means services providing manpower not consultancy. while section 194J relats to consultancy services. Technical services as per section 194J relates to expertise, or knowledge or technical know how.   

[Guest]

U/S.194 J -Fees for technical services will have the same meaning as defined under section 9(1)(vii) explanation 2.It implies what ever amount paid for the procurement of technical service and professional service with the intervention of human element is chargeable under this section. U/S.194C- Any payment made towards a contract work including supply of labour for carrying out any work in pursuance of contract is liable.However there are some exceptions are there with board clarrifications, circularNo717 dated aug14,1995

AI Summary

Understanding Differences: Section 194C Covers Contractor Payments; Section 194J Covers Professional Fees in Income Tax Act. A discussion on the differences between sections 194C and 194J of the Income Tax Act highlights that section 194C pertains to payments to contractors for business-related services, including labor supply for contract work. In contrast, section 194J applies to fees for professional or technical services, defined under section 9(1)(vii) explanation 2, involving managerial, technical, or consultancy services. The distinction lies in the nature of the services: 194C covers business contracts, while 194J involves services requiring expertise or technical knowledge. Exceptions and clarifications are noted in board circulars, such as Circular No. 717.