Payment to Doctor by Company running Hospital is liable for TDS U/s 194J and not U/s 192

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Payment to Doctor by Company running Hospital is liable for TDS U/s 194J and not U/s 192

In a recent judgment by the Delhi Bench of the Income Tax Appellate Tribunal (ITAT), a crucial distinction has been clarified regarding the taxation treatment of payments made to doctors. The bench has made a pivotal decision in the case titled ACIT vs. Artemis Medicares Services Ltd (ITA No. 554/Del/2016).

The matter revolved around whether the payments made to doctors by the assessee company, which is engaged in running hospital and multispecialty healthcare facilities, should fall under the Tax Deducted at Source (TDS) provisions of Section 194J (pertaining to professional or technical services) or under Section 192 (related to salary income).

Upholding the earlier decision by the Commissioner of Income Tax (Appeals) [CIT(A)], the tribunal has firmly stated that such payments to doctors should indeed be governed by Section 194J of the Income Tax Act. This section mandates TDS on fees for professional or technical services at specified rates, distinguishing it from Section 192, which deals with TDS on salary.

The copy of the order is as under:

1705405917-554-CO-176-Del-2016-Artemis Medicare Service Ltd

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