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August 2026

Payment for availing Google AdWords advertising services through Google’s standardised, automated self-service platform could not be characterised as fees for managerial, technical or consultancy services under section 194J and deduction of tax at 2% under section 194C was proper.

By Jagdish T Punjabi, Chartered Accountant Devendra Jain & Aditya Bhatt, Advocates
Reading Time 4 mins

39. (2026) 187 taxmann.com 871 (Hyd Trib)

DCIT v. Head Digital Works (P.) Ltd.

A.Y.: 2018-19 Date of Order : 19.06.2026

Sections: 194C, 194J

Payment for availing Google AdWords advertising services through Google's standardised, automated self-service platform could not be characterised as fees for managerial, technical or consultancy services under section 194J and deduction of tax at 2% under section 194C was proper.

FACTS

The assessee-company, running an online gaming website, availed online advertising space under the Google AdWords program from Google India Pvt. Ltd. and deducted TDS at 2% under section 194C, treating the payments as an advertising contract.

During a survey under section 133A conducted to verify TDS compliance, the AO held that the payments were fees for technical services under section 194J, observing that the AdWords platform involved sophisticated automated algorithms, real-time bidding, data analytics and interfaces, and hence constituted managerial, technical or consultancy services under Explanation 2 to section 9(1)(vii). Accordingly, he passed orders under sect

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