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Tds on contract

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(Querist)
15 August 2014 why the rate of tds on contract is 1 or 2%. why it is not 10 % like others
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TKKKKKK

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TKKKKKK (Expert)
15 August 2014 1% if payee is individual/ huf

2% if payee is other.
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Nikhil Kaushik

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Nikhil Kaushik (Expert)
15 August 2014 the reason for a lower TDS rate is because contractual works have a lower profit ratio lets say in comparison to interest income or professional fees. So keeping in mind the profit differential, the tds rate is kept at a different rate. 1% rate is also prescribed under 194-IA but there the purpose was to bring capital transfers into reporting ambit.
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Rupesh Jain

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Rupesh Jain (Expert)
16 August 2014 as mention by Mr Nikhil

due to lower profit and work of contract is labour work . it is lowers @1% or 2%
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CS,CA F,Numrologi TusharSampat

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CS,CA F,Numrologi TusharSampat (Expert)
25 August 2014 agrred with nikhil's view.......................
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