Tds u/s 194c or u/s 194j

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KAPADIA JIGNESH (Querist)
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07 October 2011 I would like to know the rate @ which Tax is to be deducted in case of Erection/installation/commissioning of Capex goods like Plant & Machineryor otherwise, in case where there is a specific agreement or contract & in case where there is an absence of agreement.

Whether in case of specific agreement it falls under "Works Contract" u/s.194C or U/s.194J.

In the same way in absence of any agreement, same would be deducted u/s.194C or 194J.

Kindly focus on this issue and oblige.

CA PRAVIN

CA PRAVIN (Expert)
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07 October 2011 Erection, Installation and commissioning is covered by section 194C.

194J is not applicable.
There are some notified services stated u/s 194J.

1] Medical
2] Lawyer
3] Audit
4] Interior Design
5] Technical Consultancy
6] Manpower recruitment
7] Architect.

Service in question is not covered under above seven services.

So 194C will apply.

CA Chitresh Gupta

CA Chitresh Gupta (Expert)
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07 October 2011 In this case section 194C will be attracted and you will be liable to deduct TDS at the following rates:

1. 1% where payment is being made to Individual or HUF.
2. 2% where payment is being made to any other entity.
3. 20% , if PAN is not quoted by the deductee.

The specific agreement or absence of agreement will not alter the nature and substance of transaction.

Regards

CA. Chitresh Gupta

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