sec 194c
This query is : Resolved
18 November 2009
sir, I have doubt regarding the following in recently the TDS rates were applied @ 2% with inclusive of (education cess) but in 194c it mentions only on specific items not mentioning about construction contracts in that case the TDS rate remains as 2.26% or 2% plz clarify me?
19 November 2009
Hi Saikiran, Section 194C has been substituted by a new section with effect from 1.10.2009. As per 194C works shall not include manufacturing or supplying of the prodict according to the requirement or specification of a customer by using raw material purchased from a person other than such customer as such a contract is a contract for sale. this will, however, not apply to contracts which does not entail the manufacture or supply of an article or thing (e.g. construction contracts). Rate of tds :
in case recipient is individual /huf 1%
in case recipient is any other person 2%
in case recipient is a transport operatorfurnishing PAN NIL
In case of works contract being manufacturing or supplying of a product according to customers specification using materials supplied by customer, TDS will be calculated on Invoice value as reduced by value of materials supplied by the customer if separately mentioned in the invoice. else it will be deducted on total invoice value.
Keep in mind that TDS is deducted on entire consideration including service tax. however, there is no surcharge, education cess or secondary and higher secondary education cess. Thanks and regards, CA Shakuntala Chhangani
in case recipient is individual /huf 1%
in case recipient is any other person 2%
in case recipient is a transport operatorfurnishing PAN NIL
In case of works contract being manufacturing or supplying of a product according to customers specification using materials supplied by customer, TDS will be calculated on Invoice value as reduced by value of materials supplied by the customer if separately mentioned in the invoice. else it will be deducted on total invoice value.
Keep in mind that TDS is deducted on entire consideration including service tax. however, there is no surcharge, education cess or secondary and higher secondary education cess. Thanks and regards, CA Shakuntala Chhangani
19 November 2009
No surcharge and cess is to be added from 01.04.2009 on tax deducted on non-salary payments made to resident taxpayers. It means that surcharges & cess is not be included in basic TDS rates.
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