Contract vs Professional Services

Contract Vs Professional Services

When TDS under section 194C applicable and When 194J applicable.

When people asked regarding the TDS to be deducted then there is confusion regarding whether the TDS to be deducted under Section 194C or Section 194J of income tax Act 1961. "Contract" & "Professional Services" when a services rendered by person can be prima facie covered under "contract" & "professional services" both.

There is a very thin line of distinction between TDS u/s 194C and 194J. "Contract" and " Professionals " are appropriately defined under their relevant section therefor i will not discuss their definition. Only one Golden Rule Applies i.e:

If the contract involves intellectual application ( Lab Testing, Auditing etc ) section 194J will be applicable

and if it involves human efforts ( Transport, Car hire etc ) section 194C will be applicable. Any exception to the above rule is welcome.  

Example
(1.)  If the person says 'Yes, i know how to do the work. I will tell you how to do it, you do
        it that way' then it is professional fees. 

(2.)  If the person says 'Yes, i know how to do the work. I will do it for you' then it is a 
        contract.

                                                                                                    https://gyandeep1477.blogspot.com/