We are into Corporate Interiors. Our System of Work is as below
We undertake Interior works from Our Clients.We received Purchase Order for the same. Our Clients Deduct TDS @2%
We hire different Contractors(Material/Labour/Material & Labour) to carry out the work entrusted to us by our clients. Agreement between us and our subcontractor is oral. We are deducting them TDS @1% plus appicable Surcharge & Education cess.
Is the agreement between us and our subcontractor is Mandatory as per IT Act? Is there any section/rule or Case law which says that agreement is mandatory? In the absence of any agreement is there any need to deduct TDS @2%.
28 August 2009
contract is not manadatory but sub- contract means in sec 194C when project is outsourced to sub contractor. if any work is got done by contractor for completion of his work then , tds @ 2 % is deductible.
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