Tds on works contract

This query is : Resolved

CA Ganesh Karthik (Querist)
Follow

29 October 2011 Is TDS on works contract deductible on the whole contract value even if there is a clear bifurcation between material nad labour?

Eg. If the works contract value is for 1 Crore, and material is 60% and labour is 40%. Then is the Income Tax TDS deductible on the entire 1 Crore or only on 40 lakhs?

Thanks in advance..

CMA Ashutosh Kumar Gupta

CMA Ashutosh Kumar Gupta (Expert)
Follow

29 October 2011 With a clear bifurcation in invoicing, TDS is on labour cost but 60% material cost as in your case need to be VAT driven/charged and 40% with ST (Service Tax) driven, if ST applies, else a composite scheme comes in to operation and on total value of works contract TDS is need to be done apart from WCT