The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) clarified the applicability of Tax Deducted at Source ( TDS ) provisions on salary payments to doctors, determining that such deductions fall under Section 194J of the Income Tax Act, 1961 rather than Section 192.
The assessee is company operating in the healthcare sector, specifically in establishing and managing hospital and multi-specialty healthcare facilities. Following a TDS Survey under Section 133A of the Income Tax Act conducted at the assessee’s premises, it was revealed that the company had been making consultancy payments to doctors, subject to TDS under Section 194J.
However, the Assessing Officer (AO) insisted that these payments should be treated as salary, warranting TDS under Section 192 of the Act. Consequently, proceedings under sections 201(1) and 201(1A) were initiated against the assessee to collect differential TDS rates, treating them as an ‘assessee in default’ and imposing consequential interest.
Upon appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] noted affirmed that payments to doctors should indeed be covered solely under Section 194J, not Section 192.
Considering the submissions, the two-member bench comprising Anubhav Sharma (Judicial member) and M. Balaganesh (Accountant member) reaffirmed that TDS on salaries paid to doctors, across all categories, falls under Section 194J of the Income Tax Act.
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