Doctor's remuneration to suffer TDS u/s 192 and not 194J, if he is governed by service rules of employer

0 comments Sunday, August 26, 2012

ITAT Ahemdabad in DCIT vs Wockhardt Hospitals Ltd. has held that Where assessee-hospital engaged some doctors on fixed monthly remuneration, and doctors were governed by its service rules, remuneration paid was taxable as 'salaries' and liable for deduction of tax under section 192.
In this case the assessee-company was running hospital with branches. It had engaged services of some doctors and was deducting TDS from payments made to them under section 194J. According to the assessee, the doctors were appointed as consultants whose remuneration was liable for TDS under section 194J and there was no employer and employee relationship. The Assessing Officer, however, treated the relationship between the doctors and the assessee as one of employer and employee and held that said payments were liable to TDS under section 192. The Commissioner (Appeals) allowed the assessee's appeal.

On the revenue's appeal it was held as under:
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