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Ramesh Sharma
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  1. CA Vishnu Ram Enlightened

    Yes, TDS @10% shall be deducted from the membership fee U/s 194J. Membership fees collected by an association usually include access to managerial, technical, and consultancy services, reflecting the benefits provided to members. Consequently, such fees are subject to TDS at 10% under Section 194J.Read more

    Yes, TDS @10% shall be deducted from the membership fee U/s 194J.

    Membership fees collected by an association usually include access to managerial, technical, and consultancy services, reflecting the benefits provided to members. Consequently, such fees are subject to TDS at 10% under Section 194J.

    Exemption: where the amount of such sum or, the aggregate of the amounts of such sums credited or paid during the financial year does not exceed by INR 30000.

    As per Section 194J, professional fee means:

    (a) “professional services” means services rendered by a person in the course of carrying on legal, medical, engineering or architectural professions or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or of this section;

     (b) “fees for technical services” means rendering of any managerial, technical or consultancy services

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Ramesh Sharma
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  1. CA Manish Kumar Gupta Enlightened
    This answer was edited.

    TDS shall be deducted under section 194J@10% if the payment exceeds the threshold limit i.e. INR 30000 on certification charges like ISO, Great Place of Work, Best Coach, etc. Here is the detailed analysis of sec 194 J   TDS under section 194J is deducted on payments exceeding the threshold limRead more

    TDS shall be deducted under section 194J@10% if the payment exceeds the threshold limit i.e. INR 30000 on certification charges like ISO, Great Place of Work, Best Coach, etc.

    Here is the detailed analysis of sec 194 J

     

    TDS under section 194J is deducted on payments exceeding the threshold limit for below payments.

    Type of Payments Rate of tax deduction Threshold Limit
    Technical service 2% Rs. 30,000
    Payment of royalty for sale, distribution or exhibition of cinematographic films. 2% Rs. 30,000
    Other Royalty 10% Rs. 30,000
    Professional Services 10% Rs. 30,000
    Non-compete fees or fees paid not to share any technical knowledge or know-how 10% Rs. 30,000
    Payments made by the company to directors by way of fees, commissions or remuneration 10% Nil

     

    Professional services include following services:

    • Legal
    • Medical
    • Engineering
    • Architectural
    • Accountancy
    • Technical consultancy
    • Interior decoration
    • Advertising
    • Film artist
    • Company secretary
    • Authorised representatives
    • Profession of information technology
    • Sportspersons
    • Commentators
    • Event managers
    • Anchors
    • Umpires and referees
    • Physiotherapists
    • Coaches and trainers, team physicians, and sports columnists

     

    Fees for technical services include the following payments:

     

    • Services that involve technical expertise or expertise in technology.
    • Managerial services and management of the client’s business.
    • Consultancy services and business advisory services.

    Note: Technical service does not include services provided by machines or robots.

    Royalty means the payment made for:

    • Transfer of rights or usage of an invention, model, design, trademark, patent, etc.
    • Use of patents, inventions, designs, etc.
    • Provide any information related to using an invention, patent, formula, etc.
    • Transfer of rights related to scientific findings, literary work, films or videotapes for radio broadcasting but does not include consideration for the sale, exhibition, or distribution of cinematographic films.
    • Providing any information related to technical, industrial, commercial or scientific knowledge, experience or skill

     

    Non-compete fees include the payment made for an agreement for not sharing any license, patent, trademark, franchise, know-how, commercial or business rights, or information to any other person for processing, manufacture, or provisional service.

    Thanks

     

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Ramesh Sharma
Enlightened
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  1. CA Vishnu Ram Enlightened

    If the invoice clearly separates the value of goods and services, then:✅ TDS is applicable only on the service component, as TDS is not deductible on the purchase of goods.✅ No TDS on the goods portion, as per the CBDT Circular No. 715 (1995) and various case laws. Check the contract terms to determRead more

    If the invoice clearly separates the value of goods and services, then:
    ✅ TDS is applicable only on the service component, as TDS is not deductible on the purchase of goods.
    ✅ No TDS on the goods portion, as per the CBDT Circular No. 715 (1995) and various case laws.

    Check the contract terms to determine if it falls under works contract or pure goods purchase.

    if it falls under the works contract then TDS u/s 194 C will be deducted.

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Ramesh Sharma
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  1. CA Vishnu Ram Enlightened

    Yes, GST applicability on advance payments depends on whether the transaction involves goods or services as per the GST law: 1. Advance Payment for Goods 📌 As per Notification No. 66/2017 – Central Tax, GST is NOT required to be paid on advances received for the supply of goods (except in cases coveRead more

    Yes, GST applicability on advance payments depends on whether the transaction involves goods or services as per the GST law:

    1. Advance Payment for Goods

    📌 As per Notification No. 66/2017 – Central Tax, GST is NOT required to be paid on advances received for the supply of goods (except in cases covered under the reverse charge mechanism).
    📌 The supplier should issue a Proforma Invoice followed by a Tax Invoice at the time of supply.

    2. Advance Payment for Services

    📌 As per Section 13(2) of the CGST Act, 2017, GST must be paid at the earlier of:

    • The date of invoice (or the last date on which the invoice should be issued).
    • The date of receipt of advance payment.
      📌 The supplier must issue a receipt voucher for the advance amount received.

    3. ITC (Input Tax Credit) on Advance Payment

    📌 The recipient (buyer) can claim ITC once the Tax Invoice is received and the supplier has reported the GST payment.

    ✅ Final Answer:

    • For Goods ➝ GST not required on advance payments.
    • For Services ➝ GST must be paid at the time of advance receipt.
    • Ensure proper documentation like receipt vouchers & tax invoices for compliance.
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Ramesh Sharma
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  1. CA Vishnu Ram Enlightened

    Hi, Please refer to section 149(1) of the Company Act,2013, according to which: A One Person Company needs to have a Board of Directors consisting of individuals as directors and shall have a minimum of one director. It can have directors up to a maximum of 15 which can also be increased by passingRead more

    Hi,

    Please refer to section 149(1) of the Company Act,2013, according to which:

    A One Person Company needs to have a Board of Directors consisting of individuals as directors and shall have a minimum of one director. It can have directors up to a
    maximum of 15 which can also be increased by passing a special resolution as in case of any other company.

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Ramesh Sharma
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    Hi, Section 135 of Companies Act is applicable to every company  which is having : • net worth of Rs 500 crore or more; or • turnover of Rs 1000 crore or more; or • a net profit of Rs 5 crore or more during any of the three preceding financial years. The word used here is ’every company’, However, iRead more

    Hi,

    Section 135 of Companies Act is applicable to every company  which is having :
    • net worth of Rs 500 crore or more; or
    • turnover of Rs 1000 crore or more; or
    • a net profit of Rs 5 crore or more
    during any of the three preceding financial years.

    The word used here is ’every company’, However, in terms of rule 6(2) of companies (Incorporation) Rules, 2014, an OPC loses its status if paid-up capital exceeds Rs. 50 lakhs or average annual turnover is more than 2 crores in three immediate preceding consecutive years.

    In view of this, it is quite clear that an OPC would not meet the criteria specified in section 135 as detailed above.

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Ramesh Sharma
Enlightened
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  1. CA Vishnu Ram Enlightened

    Please refer the rule 3 of the Companies (Incorporation) Rules, 2014, which provides that only a natural person who is an Indian citizen and resident in India is eligible to incorporate OPC. Therefore, the question of any “body corporate” or other organizations can not constitute a One person companRead more

    Please refer the rule 3 of the Companies (Incorporation) Rules, 2014, which provides that only a natural person who is an Indian citizen and resident in
    India is eligible to incorporate OPC. Therefore, the question of
    any “body corporate” or other organizations can not constitute a One person company. Naturally, they are not a natural person.

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Ramesh Sharma
Enlightened
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  1. CA Vishnu Ram Enlightened

    Following are the differences between advances and loans. A Loan is a financial assistance given with an absolute promise to repay, whereas an advance is given against the supply of goods and services. Generally, Loan carries a rate of Interest against the financial assistance whereas an Advance doeRead more

    Following are the differences between advances and loans.

    A Loan is a financial assistance given with an absolute promise to repay, whereas an advance is given against the supply of goods and services.

    Generally, Loan carries a rate of Interest against the financial assistance whereas an Advance does not carry such a rate of interest.

    A loan can be for a long-term period whereas an advance is given for a short-term period and against work or project.

    A loan is always repaid, whereas an advance is adjusted with the outstanding bill amount.

    Example-Advance given to employees against the current month’s salary. A loan is given to employee for buying a Car.

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Ramesh Sharma
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  1. CA Manish Kumar Gupta Enlightened

    Hi, It's a very interesting question and  I was waiting for it. Lots of companies are appointing a CFO cum Company secretary to save costs. Following provision will help to understand the context of the question: As per section 203, prescribed class of companies shall have the following whole-time kRead more

    Hi,

    It’s a very interesting question and  I was waiting for it. Lots of companies are appointing a CFO cum Company secretary to save costs. Following provision will help to understand the context of the question:

    As per section 203, prescribed class of companies shall have the following whole-time key managerial personnel
    (i) managing director, or Chief Executive Officer or manager and in their absence, a whole-time director;
    (ii) company secretary; and
    (iii) Chief Financial Officer
    Here, the term used is ‘whole-time’ and therefore, three different individuals are required to hold these three key positions.
    Further, as per Regulation 78 of Table F,

    ‘a provision of the Act or these regulations requiring or authorizing a thing to be done by or to a director and chief executive officer, manager, company secretary or chief financial officer shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of, chief executive officer, manager, company secretary or chief financial officer’.

    Hence, with the above provision of the act, it is crystal clear that a CFO can not be appointed as company secretary of the company.

     

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Ramesh Sharma
Enlightened
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  1. CA Manish Kumar Gupta Enlightened

    Hi, As per Section 2(76) read with Rule 3 of the Companies (Specification of definitions, details) Rules, 2014 of the Act, Related party with reference to a company means: 1. A director or key managerial personnel or relative thereof; 2. A firm, in which a director, manager, or his relative is a parRead more

    Hi,

    As per Section 2(76) read with Rule 3 of the Companies (Specification of definitions, details) Rules, 2014 of the Act, Related party with reference to a company means:

    1. A director or key managerial personnel or relative thereof;

    2. A firm, in which a director, manager, or his relative is a partner;

    3. A private company in which a director or manager or his relative is a member or director;

    4. A public company in which a director or manager is a director AND holds along with his relatives, more than two percent of its paid-up share capital;

    5. Any Body Corporate whose Board of Directors, managing director, or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager.

    (b) Any person on whose advice, directions, or instructions a director or manager is accustomed to act.
    Note: nothing contained in clauses (a) and (b)  shall apply to the advice, directions or instructions given in a professional capacity.

    6. Holding, subsidiary, or an associate company of such a company.

    7. Subsidiary of a holding company to which it is also a subsidiary.

    8. Investing company or the venturer of the company.

    Explanation—” investing company or the venturer of a company” means a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate

    Note: Term relative in relation to a person means and includes Father, Mother, Son, Son’s wife, Daughter, Daughter’s husband, Brother, Sister, members of a HUF, Husband and wife

    Thanks

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