Job
This query is : Resolved
12 January 2021
In case of electronics item manufacturer, when we can Apply TDS & which section
09 July 2024
In the context of an electronics item manufacturer in India, Tax Deducted at Source (TDS) applies when certain payments are made to vendors, contractors, or service providers. The relevant section under the Income Tax Act, 1961 that governs TDS is Section 194C.
Here are the key points regarding TDS applicability for an electronics item manufacturer:
1. **Nature of Payments**: TDS under Section 194C applies to payments made to contractors/sub-contractors for carrying out any work (including supply of labor for work), or for providing services related to any work.
2. **Threshold**: TDS is applicable if the aggregate amount paid or credited to a contractor or subcontractor during the financial year exceeds Rs. 30,000.
3. **Rate of TDS**: The current rate of TDS under Section 194C for payments made to an individual or a Hindu Undivided Family (HUF) is 1% if they provide their PAN (Permanent Account Number). For payments to others, including companies, the TDS rate is 2%.
4. **Contractual Arrangements**: It's crucial for an electronics manufacturer to ensure that payments made to contractors or service providers are correctly classified under Section 194C. The TDS should be deducted at the time of credit of such sum to the account of the contractor or at the time of payment, whichever is earlier.
5. **Compliance**: The electronics manufacturer needs to deduct TDS, deposit it to the government treasury within the prescribed time, file TDS returns, and issue TDS certificates to the deductees (contractors/sub-contractors).
It's important to consult with a tax advisor or chartered accountant to ensure compliance with TDS provisions and to correctly interpret the specifics based on individual circumstances and transactions.
Here are the key points regarding TDS applicability for an electronics item manufacturer:
1. **Nature of Payments**: TDS under Section 194C applies to payments made to contractors/sub-contractors for carrying out any work (including supply of labor for work), or for providing services related to any work.
2. **Threshold**: TDS is applicable if the aggregate amount paid or credited to a contractor or subcontractor during the financial year exceeds Rs. 30,000.
3. **Rate of TDS**: The current rate of TDS under Section 194C for payments made to an individual or a Hindu Undivided Family (HUF) is 1% if they provide their PAN (Permanent Account Number). For payments to others, including companies, the TDS rate is 2%.
4. **Contractual Arrangements**: It's crucial for an electronics manufacturer to ensure that payments made to contractors or service providers are correctly classified under Section 194C. The TDS should be deducted at the time of credit of such sum to the account of the contractor or at the time of payment, whichever is earlier.
5. **Compliance**: The electronics manufacturer needs to deduct TDS, deposit it to the government treasury within the prescribed time, file TDS returns, and issue TDS certificates to the deductees (contractors/sub-contractors).
It's important to consult with a tax advisor or chartered accountant to ensure compliance with TDS provisions and to correctly interpret the specifics based on individual circumstances and transactions.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- ITR filing obligation due to savings deposit
- Treatment of Renting of Villa
- DTAA India & UAE
- House keeping and security services ITC can claim
- Tax payment deduction from house loan EMI
- Issue with no residency during Jan, Feb, March 2025 due to diff. between US and India tax years.
- To Keep Records
- WHAT TO SELECT IN 27Q TDS RETURN ? PAYMENT TO NON-RESIDENT
- NRI as second account holder of resident account
- Applicability of Ind AS on wholly owned subsidiary company (incorporated overseas)
- Advice on How to calculate the peak balance needed for schedule FA in India for US checking account?
- TDS deduction.
- Leave taken during Extension period of Articleship
- Regarding TDS deduction before 15CA filing
- Reversal of Interest provision in case of MSME buyer
- ITC CLAIM ON CLEARING AND FORWARDING CHARGES IN CASE OF IMPORT
- Regarding 15CA.
- Others and immediately
- INVOICE VALIDATION IN GST
- GST refund claim on Purchase of Commercial Building
Trending Online Classes
-
25 Hours GST Scrutiny of Return and Notice Handling(With Recording)
Industry Expert14 February 2025 -
Survey, Search and Seizure under Income Tax Act 1961
CA Hari Agarwal
CAclubindia
