TDS on Onsite Subscription Payment (Section 194J)
Quick Answer
TDS on Onsite subscription payments: 2%
Onsite is a software product and technical service. Under Section 194J of the Income Tax Act, TDS on technical services (including software products and services) is 2% effective from FY 2020-21.
Why 2% and Not 10%?
Section 194J covers TDS on fees for Professional and Technical Services:
| Service Type | Examples | TDS Rate |
|---|---|---|
| Professional Services | Lawyer, doctor, CA, architect, interior decorator | 10% |
| Technical Services | Software products and services, management consulting, technical consulting | 2% |
Onsite is classified as a software product and technical service. The applicable rate is therefore 2%, not 10%. This rate change from 10% to 2% for technical services was introduced from FY 2020-21 onwards.
When Does TDS Apply?
TDS under Section 194J applies when both of the following are true:
- The payer is a company, or an individual or HUF liable to get accounts audited
- The total payment to a single party exceeds Rs 30,000 in a financial year
If your organisation meets both criteria, you are required to deduct 2% TDS on your Onsite subscription payment before remitting it.
What to Do After Deducting TDS
- Deduct 2% TDS at the time of payment or credit, whichever is earlier
- Deposit the TDS to the government using your TAN number
- Issue Form 16A (TDS certificate) to Scroll Construction Pvt. Ltd. for the amount deducted
- Share the Form 16A details with the Onsite support team so the amount can be reconciled against your invoice
Tips
- Your finance or accounts team handles the TDS deduction and deposit — this is a tax compliance step and is not done inside the Onsite app
- If you are unsure whether TDS applies to your organisation, consult your CA or finance team
- Always issue Form 16A to Onsite after deducting — without it, the TDS amount cannot be claimed on Onsite’s side
If Something Goes Wrong
| Problem | What to Do |
|---|---|
| Not sure if TDS applies to you | Consult your CA — TDS under Section 194J applies if you are a company or an auditable individual or HUF and payment exceeds Rs 30,000 per year |
| Deducted 10% instead of 2% | The correct rate for software and technical services is 2% from FY 2020-21 onwards — contact your CA to rectify the excess deduction |
| Need to share Form 16A with Onsite | Contact Onsite support in your company WhatsApp group to share the TDS certificate |