TDS Deduction on internet services

[Rajiv Sinha]

pls clear about tds deduction on internet services.

 

Rajiv Sinha

[Snehal Kulkarni]



 

TDS is not deductible on services using technology -- telephone charges, Internet charges, cable TV, leased lines. Payments for use of standard facilities by the public at large in which some form of technical service is inherent are not covered under section 194J. It has also been held in the case of Skycell Communications Ltd. v. Deputy CIT[2001] 251 ITR 53 (Mad.).

 

Other payments outside the purview of TDS are

(a) Statutory payments -- fees, cess, taxes,

(b) Clearing house charges, stock exchange charges, demat charges,

(c) Subscription to databases.

 

AI Summary

TDS on internet services: payments for standard public-use technology facilities are generally not subject to deduction at source. Payments for internet access and other communication or information-access facilities provided to the public at large are treated as charges for standard facilities with an inherent technical element and are ordinarily not subject to TDS as professional or technical services; similarly, statutory payments, clearing house/stock exchange/demat charges and database subscriptions are excluded from withholding.