Regaridng deduction of TDS?

Question

We are a group of Engineers proviving repeir and maintenance services to a company and we have entered into a written contract with that company. They are deduction TDS @ 11.33% from our contract charges and has given an explanation that that these services fall under the category of Technical services and we have a pint that since we are beng paid for services contract and the contract does exist, so TDS should be deducted @ 2.26 % under Sec. 194C. What should be the applicable section in our case ?

Answer 1

Perusal and interpretation of written contract will clear if you are providing Technical Services or are working on contract basis. You should have been a alert person contract and both must have got one and same meaning i.e. Contract or Technical Services before signing the written contract.

In case signed contract is not very much clear then you request the Company to rewrite it or amend it giving the clear and one meaning to both the parties.

Also in my opinion you should not bother about the rate of TDS. Had I been in your place I would have never bothered.

Answer 2

Sub section 3 (A) of Sec 194 J of the income tax act defines the services that fall under professional/technical services:

professional services " means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or of this section;

Hence to classify as contract or professional/technical services we need to understand the nature of the services. If the basic nature of the repairs and maintenance provided by you is engineering it will fall under professional/technical services and qualify for tax deduction @ 11.33% otherwise you can treat as contractual payment and eligible for deduction @ 2.266%

Answer 3

For complete list of current TDS rates and other information, read

http://mytaxes.in/index.php?topic=8.0

Answer 4

you are cover in contract tds rate @2.266%  we are also given the tec.services to some company all are ded the tds @2.266%