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TMI BlogTDS sectionX X X X Extracts X X X X X X X X Extracts X X X X ..... Please let us know why and under which sectionof the income tax act, the tds need to be deducted for the call centre services rendered to clients. The profit percentage of any domestic call centre service, in the BPO industry is not more than 5-6%. Since the BPO business model is based on, high turnover , capital intensive , with a thin profit margin, it is in approprite for the clietns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deduct 10% TDS on every bill treating this service is equating it to " Professional services or Technical services" bringing TDS attraction u/s 194J of the Income Tax Act . Personally feels that, for all the domestic call center services should be brought u/s 194 C. Pleaes help me understand better. - Reply By DEV KUMAR KOTHARI - The Reply = In a call centre services rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are with help of man, machines and technology. the services rendered are not in nature of professional services or technical services. The call centere agents/ executive ( who makes calls) generally can be a candidate with a first class HS pass and fleuent in speaking- any professional qualification is not required. The contents of calls and other conversation is as per records and guidance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f client on whose behalf call is made. Therefore, when call center work on behalf of a client and makes call it can be said that it is a 'works contract'. Therefore, TDS u/s 194C is proper. When an engineer carry engineering activity with help of machines, tools and other manpower, e.g for repair of machines, dismentalling or assembling and installatin etc. we find element of capital and la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bor is significant , in that situtation the charges payable even to engineer falls under catagory of 'works contract' and not professional fees. Looking from another angel, as rightly stated by the querist, call centre activity is also a capital and labour intensive activity. It is basically labor activity and not a professional or technical education based activity. Therefore, in my view TD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S u/s 194J is not proper. - Reply By SUBRAMANI KRISHNAMURTHY - The Reply = Thanks for your response. Very valid comments have been made by you on the deduction of appropriate section for tds - TDS section - Query Started By: - SUBRAMANI KRISHNAMURTHY Dated:- 25-10-2011 Income Tax - Got 2 Replies - Income Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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