27 November 2013
Considering the limits of Rs 30000 per individual bill and 75000 in aggregate for Contractor what will be the treatment of TDS Deduction if there are only 2 bills of the contractor for the year:-
Bill Num 1 -Rs 35000
Bill Num 2 -Rs 15000.
Will we deduct TDS on the second bill or not?
27 November 2013
Once TDS is deducted from B.No.1 then you should deduct TDS on Bill No. 2 also. . This simple reply can have its support in the proviso to Section 194C(5). . TDS is required to be deducted when aggregate of amount of such sums credited or paid or LIKELY TO BE CREDITED OR PAID during the FY exceeds Rs.75000. . While making the Second payment of 15000/- the "LIKELY TO BE CREDITED OR PAID" fiction starts to comes into effect (as you will move towards crossing the limit) . "Likely" does not have any certainty, though you may have a strong view that there will be no 3rd Bill. . So, it's better to deduct TDS to avoid the un-liked "likely" litigation. .
13 March 2014
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