TDS on Advertisement Agencies – Section 194C
June 11, 2022|
5 mins read
TDS on advertisement agencies is required to be deducted under Section 194C of Income Tax Act 1961.
Rate and Amount for deduction of TDS
The rate of TDS is as under: –
- TDS shall be deducted @ following rates under section 194C of Income Tax Act depending on whether the payee is an Individual/ HUF or other than Individual/ HUF:
- Credit/ Payment is made to an Individual/ HUF – 1%
- Credit/Payment is made to a person other than an Individual/ HUF – 2%
- No Surcharge and Higher Education Cess (“HEC”) shall be added to the above-mentioned rates.
- TDS @ 20% shall be deducted where the payee does not provide the PAN number to the deductor.
TDS on advertisement agencies shall be deducted on invoice value, excluding the value of GST (if such value is mentioned separately in the invoice) – Circular No. 23/ 2017. However, TDS shall be deducted on whole of the invoice value (if value of GST is not mentioned separately in the invoice) – Circular No. 23/ 2017
Exemption from tax deduction under section 194C of Income Tax Act
- Where the amount credited/ paid does not exceed Rs. 30,000 in a single transaction. Further, no TDS shall be deducted, where the amount or aggregate of amounts credited/ paid during the FY does not exceed Rs. 1,00,000.
- Where consideration paid by an individual or HUF is on account of personal purpose.
- Payment made to Non-Resident contractor shall not attract TDS under section 194C of Income tax act. However, it shall be governed by provisions of Section 195
Time of deducting TDS on advertisement agencies
The time when TDS is required to be deducted is earlier of the following two events –
- Credit of such sum to the account of payee; or
- Payment in cash or by way of issue of cheque/ draft/ any other mode
For Full text of Section 194C of Income Tax Act, please refer this link
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