apllicability of 194 J of Incometax

[Guest]

sir,

We have recruited 2 legal advisors on outsourcing through third party contractors @ Rs 15000.00 per month per person.

i have deducted TDS @10% under Section 194 J of Income Tax Act, 1961

But they are arguing that they do not have much income and as such they do not come under the Income Tax perview.

They said ,they will give a declaration to the effect that they dont have taxable income and hence request to exempt from recovering TDS under Section 194 J.

Can i exempt them from recovering TDS by taking a declaration from them .

Kindly suggest rule position.

Chakravarthy S.N.

[DEVEN MASTER]

No you can not do on the basis of their declaration. It is your liability to deduct tax and claim expenditure. If they apply to IT Dept and they will issue certificate then you follow the particulars cerificate issued by the department, and at the time of filling TDS Return should mentine for non dedcution or lower deduction reason in the form.

AI Summary

TDS on professional fees under Section 194J: payer must deduct tax unless a department certificate permits lower or no deduction. Payer must withhold tax on payments to legal advisors as TDS on professional fees and cannot accept a recipient's declaration of low income to avoid deduction; only a tax authority certificate permitting lower or no deduction authorises non deduction, and the TDS return must record the reason for any non deduction or lower deduction.