Ans:
The Act contains no definition of the term "advertising." The Finance Minister clearly stated on the Floor of the House during the evaluation of the Finance Bill 1995 that the revised provisions of tax deduction at source will apply when a client pays an advertising firm, not when an advertising firm pays the media, which incorporates both print media and electronic media.
The deduction must be done at the rate of 1%. It was also emphasised that if an advertising agency pays their photographers, models, artists, and other employees, the tax is taken at 5% as it would be for professional and technical services as per section 194C of the Act.