TDS Contractor

This query is : Resolved

Swaminathan (Querist)
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03 November 2009 A concern is using a labour contractor. Before making the payment the payment towards PF & ESI is deducted and the same is deposited with PF / ESI authorities. Whether TDS is applicable for PF / ESI portional also.
As per the contractor some of the companies are not deducting TDS on PF / ESI on the basis by getting seperate invoice from the contractor.

Swaminthan

CA.Tarun Maheshwari

CA.Tarun Maheshwari (Expert)
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03 November 2009 In my opinion, PF/ESI are not liable to TDS if separately invoiced. Under 194C we need to deduct TDS on whatever amount is paid. If it is separately invoiced, then we need to deduct TDS only on the amount which is invoiced as labour charges and service charges.