TDS Payment Rules for Celebrities: The payments made to various artists participating in reality TV shows as guests or judges are liable for Tax Deduction at Source (TDS) under Section 194(C) and not Section 194J
TDS Payment Rules for Celebrities: The payments made to various artists participating in reality TV shows as guests or judges are liable for Tax Deduction at Source (TDS) under Section 194(C) and not Section 194J, according to an ITAT order. In Malayalam Communications Ltd. v. ITO, the Cochin Bench of Income Tax Appellate Tribunal (ITAT) had ruled last year that the services rendered by the artists on reality shows of the assessee were not covered by professional services as defined under Section 194J.
The case: The Tribunal’s order noted, “The Assessee had deducted tax at source from the payments made to various artists like singers, musicians etc who participated in the reality shows as guests or judges, at 1% as per the provisions of section 194C of the Act on the ground that these payments were made as per the agreement entered into with the artists for production of the programmes meant for telecast by the assessee.”
However, the tax department had asserted that TDS on payments to such artists should have been deducted at the rate of 10% as per Section 194 of the Income Tax Act.
The ITAT ruled, “It is not possible to accept the contention of the Revenue that payments made to artists who participated in reality shows produced for television will fall outside the realm of section 194C…In our opinion, it would fall under section 194C of the Act and not under section 194J of the Act.”
The ITAT order said that payment made towards a contract concerning “broadcasting and telecasting” the production of programmes for such “broadcasting or telecasting” is to be covered by section 194C.
Section 194J has provision for TDS on fees for professional or technical services.
The Explanation to Section 194J provides for deducting TDS at 10% on payment for services rendered by a person in connection with the production of cinematograph film. However, in the case of reality shows, the tribunal held that a person engaged in the production of reality show is not equivalent to the one engaged in the production of films.