02 March 2016
If Rs.100,000/- is paid to the contractor TDS u/s 194 C would in any case be applicable. The exemption from TDS is if a single payment is below Rs.30,000/- and the total payment in the financial year does not exceed Rs.75,000/-. Since the amount in question is Rs.1,00,000/- TDS @ 1% or 2% as applicable ought to be deducted and deposited in the month the total amount exceeds Rs.75,000/- provided none of the payments exceed 30,000/-. Otherwise in the month a payment of Rs.30,000/- is made TDS is applicable from that month.
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