TaxTMI 
TaxTMI 
TDS Applicability on Retail Shop Branding Charges
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....DS Applicability on Retail Shop Branding Charges<br> Query (Issue) Started By: - Ramanathan Seshan Dated:- 25-4-2025 Last Reply Date:- 29-4-2025 Income Tax<br>Got 2 Replies<br>Income Tax<br>Dear Experts, We have engaged a vendor to carry out branding activities for our retail outlets, which includes in-store branding, signage, and visual merchandising elements. Kindly advise whether TDS is applic....
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....able on the charges paid for such services. If so, under which section of the Income Tax Act should the deduction be made? Regards, S Ram Reply By YAGAY andSUN: The Reply: Yes, TDS (Tax Deducted at Source) is applicable on the charges paid to a vendor for branding activities such as in-store branding, signage, and visual merchandising. ✅ Nature of Service: Branding activities typically....
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.... fall under the umbrella of: * Contractual services (if it's a composite contract for supply + installation), * Or professional services, depending on the nature of the agreement and services rendered. 📌 Relevant TDS Sections (Income Tax Act, 1961): ✅ 1. Section 194C - TDS on Contracts Applicable when: * The branding services are part of a works contract, such as fabrica....
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....tion and installation of signage, display units, hoardings, etc. * The vendor is executing a contract (not providing professional or consultancy services). Rate of TDS under Section 194C: * 1% - if the vendor is an individual or HUF * 2% - if the vendor is a company, firm, etc. Threshold limit: * No TDS if a single payment is ≤ Rs.30,000, or * Aggregate payment in a financial year i....
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....s ≤ Rs.1,00,000 Conclusion: In most branding contracts involving materials, installation, and fabrication, Section 194C is the correct section to deduct TDS under. 🚫 Not under Section 194J - unless: If the service is purely of a consultative or professional nature (like brand strategy, graphic designing, advertising consultancy), it may attract TDS under Section 194J (10%). But this ....
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....seems less likely in your case. 📝 Recommendation: * Review the scope of work in your vendor contract. * If it involves execution of branding/fabrication/installation work, deduct TDS under Section 194C. * Deduct at 1% or 2% depending on the vendor's constitution. *** Reply By Ramanathan Seshan: The Reply: Dear Yagay-sir, Thanks for your valuable response. Regards, S Ra....
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