TDS Applicability on Interest on Moblisation Advance

This query is : Resolved

G.N.V.D.Kiran

G.N.V.D.Kiran (Querist)
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20 May 2008 Dear Sir,

We are Civil Contractors we are getting moblisation advance from Contractee( Govt / Private) They are deducting interest on moblisation advance from our running account bills

we have to Deduct TDS or Not. since we are not paying any interest directly to them they are directly deducting from our running account bills bills

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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20 May 2008 you have to deduct tax u/s 194A at the time of payment or credit, whichever is earlier, so clearly your liablity arise to deduct tax.

on govt. deparments you don't need to deduct tax, it is not reqd.

on pvt. contracts, discuss with contractee and charge TDS amopunt in ur bills. better raise seperate bill for tds.

meanwhile deposit tds corresponding to date of credit in ur books.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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21 May 2008 Mobilisation of advance is also subject to deduction of tax at source.

The contractee is the person who will ddeduct. Your statement "we (contractors)have to deduct TDS or not"is therefore not understood. Secondly where is the room for interest is not clearly stated.

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