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

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.