Tds on hospitals u/s 194J, Income Tax

[anmol bohra]

plz solve my query that if TPA make payment to hospital then should he liable for tds on hospital u/s 194J,,, plz give some reason and reference why for 194J not for 194C....plz solve it....

Posts / Replies

[Rama Krishana]

Before discussion let us understand the facts: TPA is a third party administrator appointed by the Insurance Companies. The claim of patient is being paid by the insurance companies through TPA. The commission to TPA is paid by the insurance companies which is ultimately born by the insured as part of premium. - In view of above facts, my view is the commission received by TPA is subject to deduction of TDS only. Since it is a contractual payment but not in the nature of professional service, TDS requires to be deducted u/s 194C. The payment to hospitals by the TPA is not liable for any deduction of tax at source.