TDS Applicability on Commercial Photography & Creative Services – Section 194J or 194C?, Income Tax

[Ramanathan Seshan]

Dear Experts,

Our company engages a commercial photographer who also serves as a creative producer and visual storyteller. He delivers a complete solution for our product marketing needs, including model-based shoots, social media posters, and reels. The invoice he provides includes a detailed breakup of the following services:

• Assignment charges for photography

• Equipment and lighting

• Image compositing and retouching

• Video editing, grading, animation, and voiceover

• Script and content writing

• Model casting and coordination

• Costume and hairstylist sourcing and assignment charges

• Studio location charges

• Travel and accommodation

Considering the nature of these services—which involve creative and professional components—should TDS be deducted under Section 194J (Fees for Professional/Technical Services) or Section 194C (Payments to Contractors)?

Regards,

S Ram

Posts / Replies

[YAGAY andSUN]

In the given case, the services rendered by the commercial photographer encompass a wide spectrum of creative, technical, and coordination activities, including but not limited to photography, video production, script writing, model casting, and post-production work. These services are delivered as a bundled, end-to-end solution for marketing and branding purposes, and involve specialized skills in the field of visual storytelling and media creation. The nature of engagement, therefore, goes beyond mere execution and involves significant intellectual and artistic input. Considering the expertise and professional judgment involved in the delivery of these services, there is a strong basis to classify the engagement under Section 194J of the Income Tax Act, 1961, which covers fees for professional services, including those provided by individuals in the fields of creative and artistic work.

However, the scope of Section 194C, which applies to contracts for carrying out any work, including advertising and broadcasting services, has also been interpreted broadly by judicial authorities. If the arrangement with the photographer is treated as a composite work contract primarily for execution of deliverables rather than professional consultancy or advisory, then TDS under Section 194C may be applicable. In light of CBDT Circulars  and subsequent judicial interpretations, if the principal character of the engagement is that of execution of a contract for work (i.e., deliverables for a pre-agreed fee), Section 194C would apply. Therefore, a detailed review of the contractual terms, degree of artistic discretion, and independence in execution would be necessary to conclusively determine the appropriate section. In borderline cases involving creative professionals, conservative practice leans toward deduction under Section 194J, subject to documentation and nature of services.