Applicability of tds u/s 194c
This query is : Resolved
13 June 2016
Provision Sec 194 C is as follows,
(1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor ) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to—
(i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;
(ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family,
of such sum as income-tax on income comprised therein.
However the Circular no 01/2014, service tax portion has been excluded from the deduction of Tax, provided same is mention sepreately on the invoice.
Further, "No deduction shall be made from the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor, if such sum does not exceed [thirty] thousand rupees" .
Since ST is also payable to the Party, so whether to determine the THL of (Rs.30000/75000), the ST has to be be considered?
(Just to determine the applicability and not for deduction).
(1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor ) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to—
(i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;
(ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family,
of such sum as income-tax on income comprised therein.
However the Circular no 01/2014, service tax portion has been excluded from the deduction of Tax, provided same is mention sepreately on the invoice.
Further, "No deduction shall be made from the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor, if such sum does not exceed [thirty] thousand rupees" .
Since ST is also payable to the Party, so whether to determine the THL of (Rs.30000/75000), the ST has to be be considered?
(Just to determine the applicability and not for deduction).
13 June 2016
TDS will deducted on the basic amount not on the total value of the invoices, or make payment which ever in earlier
13 June 2016
But in the given case Total Invoice Amount is 32060 out of Service Value us Rs.28000, where as sevice tax Rs.4060, so total amount credited to the Party Rs.32060. so whether TDS will attracted on 28,000 portion?
13 June 2016
From 01.06.2016 threshold limit Increased to Rs.100000/- u/s 194C , Bill or Payment exceed Rs.30000/- even TDS attract on Net but bill or Payment Value Exceed Rs.30000/- so you have to deduct TDS
13 June 2016
For threshold limit you have to considered 32060 but for deduction you have to deduct excluding service tax of Rs. 28000/-
Message likes :
2 times
29 June 2016
Hi, Deduct TDS as NET Payment crosses 30K,for paying TDS exclude ST.
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