Section 194C : TDS on advertisements is deducted U/s 194C and 194J of the Income Tax. This article will explain everything with respect to TDS deduction with respect to advertisements. The issue of the applicability of TDS on payments made by television channels or media houses, publishing newspapers or magazines to advertising agencies for procuring and canvassing for advertisements has been examined by the CBDT in view of representations received in this regard.
TDS on AdvertisementsAny person responsible for paying any sum to any resident (contractor) for carrying out any work (includes supply of labour) in pursuance of a CONTRACT between the contractor and the specified person then the specified person has to deduct TDS on the amount paid or payable for the work done.
- Broadcasting, telecasting of products
- Catering etc.
ApplicabilitySection 194C is the ruling section for TDS with respect to advertisements.
- As per Section 194C, the service receiver which is responsible for paying the contractor or sub-contractor, with respect to the contract to carry out any work or work-related activities, is also responsible for deducting TDS from such payment.
- Such TDS is required to be deducted earlier of
- Payment or
- Work which is carried out under any contract also includes advertising. Hence, section 194C is also applicable for advertisements.
- However, such TDS deduction is warranted by the person who receives the service from an advertising agency and hence, an advertising agency is not under the onus for deducting TDS.
- Payments made to advertising agencies are subject to TDS deduction under 194 However, payments made by an advertising agency to its artists, photographers, etc. is covered under section 194J and not 194C. Hence, these payments by advertising agency are subject to TDS deduction @ 5%.
Threshold for deducting TDSThe service receiver must deduct TDS under 194C on advertisements where
- Either total sum paid or credited during any financial year is more than Rs.100000(applicable from June 2016) or
- Single payment to any service provider which is more than Rs.30000
- Where the payment is made to any individual or HUF – 1%
- Where the payment is made to any other entities – 2%
- Section 194C is not applicable where the payer is individual or HUF or AOP or BOI, who have gross receipts, sales, or turnover not more than
- 1 crore for any business
- 25 lakhs for any profession
- Section 194C is also not applicable where such payment is for the personal use of the payer (who may be either individual or HUF).
- Payment made to Doordarshan - Not covered under the purview of 194C. Hence payments are not eligible for TDS deduction under 194C.
- Direct payments to print or electronic media - Covered under 194C and hence payments eligible for TDS deduction under 194C.
- If space is taken on rent and then further sublet for putting advertisement hoardings, the eligible for TDS under section 194I (rent).
- For any other cases, 194C is applicable.
- 2% if the deductee is company
- 1% if the deductee is non company