Background
Under section 194J, certain categories of persons are required to deduct tax at
source while making payment for professional services. For this purpose,
“professional services” is defined in the section. At the same time, power has been
given to the CBDT to notify any further services that would also fall under the definition.
Notification issued recently
In exercise of these powers, the CBDT has issued a notification (No. 88/2008/F.NO.
275/43/2008-IT (B)) on 21st August, 2008 and has notified a few new services which
would now be treated as “professional services” and would therefore be covered by
the TDS section 194J.
The text of the said Notification is given below:
SECTION 194J OF THE INCOME-TAX ACT, 1961 –DEDUCTION AT SOURCE
OF TAX – NOTIFIED PROFESSIONAL SERVICES
NOTIFICATION NO: 88/2008/F.NO. 275/43/2008-IT (B), DATED 21-8-08
In exercise of the powers conferred by clause (a) of the Explanation to section
194J of the Income Tax Act, 1961, Central Board of Direct Taxes hereby notifies
the services rendered by following persons in relation to the sports activities as "Professional Services" for the purpose of the said section, namely: –
Sports Persons,
Umpires and Referees,
Coaches and Trainers,
Team Physicians and Physiotherapists,
Event Managers,
Commentators,
Anchors and
Sports Columnists
This notification shall come into force with effect from the date of its publication in
the Official Gazette. |
What does this mean for you?
As a tax deductor, you would already be deducting tax under section 194J from payment
of fees for professional services rendered by Lawyers, Chartered Accountants,
Engineers, Architects, etc. Now, in view of the latest Notification, you would also be
required to deduct tax at source from payment made to any of the persons listed in
the said Notification. As can be seen from the list, all of them are in relation to sports. |
