TDS on honorarium

prasad joshi (Querist) 23 June 2009 This query is : Resolved
I deliver lectures in a reputed institute.They pay me 'honorarium' as per the wording in written used by the Director of the institute itself .However there is no written contract between me and the institute.As per the Director, this is an excessive formality!!!Can the institute under such circumstances apply TDS on my honorarium? Is contract an excessive formality?This is not only my case; but a case of 43 visiting faculty members.
Please guide me in this matter.

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A V Vishal (Expert) 23 June 2009
Dear Mr Joshi

The honararium you are receiving falls under the head of Income from other sources since the periodicity of the visit varies and you are a visiting faculty. The TDS has to be deducted at 10.3% under s.194J viz. fee for professional or consultancy service. However, as per your query it is evident that the institute is treating it as a contract and deducting it at 2.26% or maybe 2.06%. The institute is correct in making the deduction.