Section 194J : TDS on Remuneration of Doctors

Doctors not entitled to gratuity and PF aren't employees of hospitals; sums paid to them would attract sec. 194J TDS

[2015] 57 taxmann.com 255 (Karnataka)

HIGH COURT OF KARNATAKA

Commissioner of Income-tax, Bangalore

v.

Manipal Health Systems (P.) Ltd

Section 194J of the Income-tax Act, 1961 - Deduction of tax at source - Technical service fee (Doctors) - Assessment years 2006-07 and 2007-08 - Assessee-hospital, while paying remuneration to consultant doctors, deducted TDS under section 194J - Assessing Officer held that there was employer-employee relationship between assessee-hospital and consultant doctors and, therefore, TDS was to be deducted under section 192 - Terms of contract between assessee and doctors ispo facto proved that contract between assessee-company and doctors was of 'contract for service' not a 'contract of service' - Income of doctors varied, depending on patients and their treatment and none of doctors was entitled to gratuity, PF, LTA and other terminal benefits - Whether consultant doctors working in assessee's hospital could not be construed as employees of assessee-company and professional fee paid to them attracted TDS under section 194J and not under section 192 - Held, yes [Paras 13 to 16][In favour of assessee]