14 September 2015
Section 194C of the Income Tax Act, 1961 prescribes that any payment to a contractor is subject to a Tax Deduction at Source (TDS) at the rate of:
1% in case the payee is an Individual or a Hindu Undivided Family, and 2% in case of other payees (i.e. partnership firm, company, trust, body of individuals or association of persons)
if such payment exceeds Rs. 30,000 per contract or aggregate of such payments of contracts in a financial year exceeds Rs. 75,000.
Effective June 1, 2015 TDS will be applicable at the rate of 1% or 2%, as the case may be, in the case of all payments made to a contractor during the course of plying, hiring or leasing of goods carriage, except in cases where such contractor has furnished a Declaration.
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