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S. Krishnamoorthy (Business)     22 December 2008

Higher rate of TDS - BPO services

We are providing data processing and tele calling services to a MNC Bank under a written contract.  Last year, they deducted TDS on our bills @ 2% plus s/c.  This year, they have resorted to deduct TDS @ 10% plus s/c. When asked to furnish reasons for the higher rate of TDS, we were informed that we are providing professional/technical services and hence the TDS @ 10%.  Is this correct?
Only the services rendered by 'professionals' and the fee charged by technical professionals/companies for providing 'technical services' attract the higher rate of TDS.
Are we correct?
We shall be grateful for advice.
S. Krishnamoorthy


 1 Replies

A V Vishal (Advocate)     26 January 2009

The facts point out you are rendering services under consultancy, hence the deduction @ 10%

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