TDS section

[Asked by Guest]

Please let us know why and under which sectionof the income tax act,  the tds need to be deducted for the call centre services rendered to clients.  The profit percentage of  any  domestic call centre   service, in the BPO industry   is not more than  5-6%.  Since the BPO business model is based on, high turnover , capital intensive , with a thin profit margin, it is in approprite for the clietns to deduct 10% TDS on every bill treating this service is equating it to " Professional services or Technical services" bringing TDS attraction  u/s 194J of the  Income Tax Act.   Personally feels that, for all the domestic  call center services should be brought u/s 194 C.

Pleaes help me understand better. 

AI Summary

Works contract classification for call centre TDS: treat the services under 194C rather than as professional fees under 194J.
Call centre services are performed by non professional agents under client direction using labour supported by machines and technology; these characteristics align such services with a labour and capital works contract rather than professional or technical services, making TDS deduction under 194C appropriate and deduction under 194J inappropriate.