Taxablity of Honorarium

Honorarium to employee’s

Honorarium is the part of salary for income tax purpose in India.

As held in Sri Vardarajswami Transports P Ltd V/s RPF Commissioner AIR 1966 Mad 466 and

AAR (New Delhi) No. 597 of 2002 in case of Max Muller Bhuvan

Max Mueller Bhavan, In re (2004) 268 ITR 31, 32, 35 – 36 (AAR)

However Govt employees may invoke exemption u.s 10 (17A)

U/s 10 [(17A)   any payment made, whether in cash or in kind,—

       (i)  in pursuance of any award instituted in the public interest by the Central Government or any State Government or instituted by any other body and approved ⁷⁷ by the Central Government in this behalf; or

      (ii)  as a reward by the Central Government or any State Government for such purposes as may be approved⁷⁷ by the Central Government in this behalf in the public interest;]

Honorarium to Professional’s

On other hand honorarium is not for any services rendered on request and authorization to do work or as per agreement- the work as well as honorarium both are voluntarily. An author submit article without any obligation, the same may be published or not. The publisher may or may not pay honorarium even after publication of article. The honorarium is not mutually decided. It is paid as an honor or regard and not as consideration for service or goods, provided voluntarily. Therefore, honorarium e.g. to author of articles, is not in nature of porfessional or technical fees to which provisions of S. 194J apply.

Honorarium to netiher Professional’s nor employee
If the person receiving the honorarium is neither employee nor professional then payee is not liable to deduct TDS u/s 192 nor u/s 194J. However the person receiving the Honorarium will have to show it as income from other sources.