t d s on contractor

This query is : Resolved

rajni ASHANI (Querist)
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05 May 2010 as per the amenndments in t d s wef 01-10-2009 there is No tds in case of payment of Job work ,if raw material has not been supplied by the payer. please guide me.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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05 May 2010 If the material is supplied by the principal, the value of material shall be excluded for the purpose of TDS. However, job charges, if it exceeds the threshhold, attracts TDS.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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05 May 2010 AGREE WITH EXPERT.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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05 May 2010 It is not a "work" as per the substituted section 194C and hence Income tax need not be deducted at source.

taxindiaconnect

taxindiaconnect (Expert)
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05 May 2010 Agreed, though would like to add a point here that the amendment in the Act is the result of a long drawn controversy on the issue of contract for "Work" or contract for "Sale". Various circulars issued on the topic were prone to interpretations thus the litigation on the subject continued. Now definition of "work' has been clearly included in the Act itself, the things are settling. Dabur India, Wilmer Schwabe are land mark cases of Delhi High Court on the subject.