t.d.s. on contract payment

This query is : Resolved

jigar (Querist)
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11 November 2009 one of our client is society registered under societies act. various milk supplying mandali are supplying milk to our client. client has installed several machine at various mandalis for which A.M.C. payment is made by the client but it is to be recovered from respective mandalis so at the time of accounting, various manadalis a/c is debited and contractor a/c is credited.

my query is whether my client is required to deduct any tax on payment made to contractor. and if does not deduct tax then what are the consequences.

Sunil

Sunil (Expert)
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11 November 2009 The condition for TDS is for a contract between the specified person and the contractor. As the contract is between society and contractor, TDS has to be done by the person responsible for paying to the contractor. Therefore society should deduct TDS and issue certificate. The Mandalis are reimbursing the society.