Hi, I have a proprietorship concern. I have to pay 50% of the profits to a friend of mine who helps me in the conduct of business. He desires that that money be paid to him as consultancy fee. I do not have any registration other than PAN card. He is also not registered anywhere other than having a PAN card. Kindly let me know what registration do I require and how much I should deduct from his payment. Thanks in advance for the kind assistance, Regards, Prasad
In case of payment of consultancy fee, tax may be deducted at source as per sextion 194J of the I T Act . But that is only when the sales turnover of the business exceeds Rs 40 lakhs in case of trading business and if you har carrying in profession unde the proprietroship concerne , then the sales turnover should excced Rs 10 lakhs .
So the point to check in you case is the turnover . In case , you find that the turnover exceeds the specifed amount (RS 40 Lakhs or 10 lakhs as the case may be ), you need to regsiter for TAN .Read for how toget the TAN online
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