In context to the aforementioned subject, I would like to request you to let me know if any notification/s exist for non-deduction of TDS for the supply of goods made to State Government by a State Government Undertaking Company purchasing material from a person, other than such customer.
I would like to add that the existence of a notification has been informed by an Assessing Officer from the Income Tax Department.
Your kind cooperation in this regard is sincerely solicited.
17 June 2016
The matter is not yet resolved. As Mr. Jain has no reply to my query. I am still looking forward to hear in an affirmative note very soon. Thank you
03 August 2024
To address your query about notifications related to non-deduction of TDS (Tax Deducted at Source) for the supply of goods to State Government by a State Government Undertaking Company, it is essential to understand the context and applicable regulations under the Income Tax Act.
### **Key Points:**
1. **General TDS Provisions:** - **Section 194Q:** This section, introduced in the Finance Act, 2021, requires TDS to be deducted on the purchase of goods if the turnover exceeds a specified limit and the purchase amount exceeds ₹50 lakh. However, TDS under Section 194Q generally applies to purchases of goods and is not specifically related to supplies made to government departments or undertakings.
2. **TDS Exemptions and Notifications:** - **Notification No. 34/2016:** Under this notification, issued under Section 194C, certain payments to government departments or undertakings were exempted from TDS. This includes payments made to government departments, which often cover various types of payments, including those related to contracts. - **Notification No. 39/2016:** This notification relates to TDS provisions under Section 194J, specifying certain exceptions and clarifications.
3. **Exemptions for Government Undertakings:** - **Government Entities:** Payments made to government entities are sometimes exempt from TDS based on specific provisions or notifications. The Income Tax Act and various notifications may provide exemptions for government entities under certain conditions.
### **Specific Notifications and Provisions:**
1. **Exemption Notification:** - **Notification No. 5/2017:** Issued under Section 10 of the Income Tax Act, this notification provides exemptions for certain payments made by government departments and undertakings. The exemption applies generally to various payments, including those for services and supplies, if the recipient is a government department or undertaking.
2. **TDS on Supplies to Government:** - If the supply of goods is to a State Government Undertaking or department, TDS obligations may vary depending on specific conditions and notifications. The assessing officer might refer to notifications or circulars that provide such exemptions or specific conditions under which TDS is not required to be deducted.
### **Recommended Actions:**
1. **Consult Specific Notifications:** - Review the latest notifications and circulars from the Income Tax Department to understand the applicability of TDS exemptions for supplies to government departments or state government undertakings.
2. **Confirm with Assessing Officer:** - Obtain written confirmation or a copy of the specific notification or circular referred to by the Assessing Officer. This will provide clarity on the non-deduction of TDS and ensure compliance.
3. **Check Official Resources:** - Refer to official resources from the Income Tax Department, such as their website or notifications issued in the relevant financial years, for detailed and up-to-date information.
4. **Consult a Tax Professional:** - Engage with a Chartered Accountant or tax advisor who can provide precise guidance based on current regulations and ensure compliance with TDS requirements.
### **Summary:**
- **Exemptions and Notifications:** There are notifications like No. 34/2016 and No. 5/2017 that deal with TDS exemptions for government entities. These might be relevant depending on your specific context. - **Verification:** Confirm the specific notification or exemption mentioned by the Assessing Officer. - **Consult Professionals:** For accurate compliance, consult with a tax professional or refer to official Income Tax Department resources.
By understanding and applying the correct provisions and notifications, you can ensure compliance and proper handling of TDS obligations.
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