Upgrad
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Queries Participated

Prakash Shah   25 November 2010 at 14:45

Tax Deduction at Source on Service Charges

A company is engaged in the online ticket booking services and uses the facilities of a payment gateways - i.e. CCAvenue (which is widely used in India by most of the e-commerce companies). CCAvenue deducts service charges on the amount collected on behalf of the company from the customers and remits the balance money to the company in the company's bank account. Whether, the company is required to deduct tax at source on the service charges charged (nature of expenditure is of that of bank charges)by CCAvenue to the company ??? Also if yes, then under which section 194C or 194H or 194J. The company deducts the amount under head - TDR (Transaction Discount Rate) and charges an annual software maintenance fee to the company.