194J defination of Professional Fees

[madhav dasani]

Sir, I would like to submit a query which came to my notice while conducting statutory audit of an organizaton. Brief of the organization: Here the company is registered under Section 25 of the Companies Act, 1956 for promotion of Trade Organizations all over the world. Here the the company has hired many esteemed lawyers for many civil and consultaion matters on a recurring basis and being paid professional fees for the services rendered and accordingly TDS has been deducted at relevant and appropriate rate. They are also taken and sent on delegation on various foriegn tours at the discretion of the management for purpose of prmoting trade and commerce and such expense is borne by the company in totality. Query: With the purview of Section 194J, expressly inclusion of the words by cash, cheque or any other mode tantamounts to inclusion of such foriegn travel expenditure which is material in every respect in professional fees being paid and such professional fees is liable to deduction of TDS or not?

AI Summary

Foreign travel expenses and daily allowances for lawyers not subject to TDS under Section 194J. A query was raised regarding whether foreign travel expenses and daily allowances paid to lawyers hired by a company registered under Section 25 of the Companies Act, 1956, should be considered professional fees subject to Tax Deducted at Source (TDS) under Section 194J of the Income Tax Act. One reply clarified that travel expenses are not considered professional fees and thus are not subject to TDS under Section 194J. A further query questioned whether daily allowances paid in foreign currency, without documentary evidence or refunds, attract TDS under the same section.