TDS APPLICABILITY ON SPONSORSHIP FEE

ponsorship means that company paying money to sponsor individual or some group, some event or an activity, usually for advertising or space at the event or as a part of publicity for an event which cannot communicate specific product attributes.   

TDS applicability:

Circular Number 715 dated 8-8-1995 cleared that the agreement of sponsorship of debates, seminars and other functions are in essence an agreement for carrying out a work of advertisement so the provisions of section 194C will apply for the same.
TDS under 194C-
If amount paid exceed Rs. 30,000 in a single payment and Rs. 1,00,000 in aggregate during the financial year, then TDS has to be deducted at the rate of 1% if payment made to individual and 2% for any other person and no cess or surcharge will be applicable on the same.
If the PAN is not available for the amount recipient then TDS will be deducted at the rate of 20% as per section 206AA of Income tax act. 
And the same provisions will be applicable for the sponsorship fee paid.

Sponsorship toward foreign resident and the events:

Usually for payments to NRI will attract TDS under section 195 of the Incometax Act. However payment towards sponsorship of events/persons where there is no business income and has no business connection in India and assesse is not an agent then it will not attract TDS on such payments.

Relevant Decided cases:

HIGH COURT OF KERALA, Commissioner of Income-tax Vs Malayala Manorama Co.Ltd
In the case assesse claimed exemption to deduct TDS on membership fee paid to International Press Institute(IPI),Assessing officer called upon assesse to deduct TDS u/s 195(1).As it applicable only if payment made to an income tax assesse in India. Since IPI is non-resident body, had no permanent establishment in India and assessee was not an agent of IPI, so TDS u/s 195 will not applicable