TDS on Payment to Contractors

This query is : Resolved

SRINIVASA RAO P (Querist)
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05 March 2025 Query on applicability of TDS under Section 194 C :

X is a Company engaged in Real Estate Business and Y is a Contractor (Individual) working for Company X .

Now Y receives the following amount of payments from X during the whole Financial Year for two different works :
1. Rs. 10,00,000/- received for supply of tent house material (Shamiana , Chairs , Tables , etc., ) at the site of Company X for promotion of its business and
2. Rs. 50,000/- received (in small amounts of less than 5,000/- on different dates) for catering services.

In the first case TDS was effected on the total payment of Rs. 10,00,000/- and whereas in the second case TDS was not effected on the total payment of Rs. 50,000/- as the aggregate amount of payment for doing this second work has not exceeded the threshold limit of Rs. 1,00,000/- during the F Y

Query is :
Since the person Y is a single Contractor and doing two different works altogether for Company X and received the payment from Company X , Is TDS applicable on the second payment of Rs. 50,000/- also or not ?

Kindly clarify .

Thank You.

Dhirajlal Rambhia online

Dhirajlal Rambhia online

(Expert)
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05 March 2025 Yes, TDS on all the payments received by contractor having same PAN is applicable u/s. 194C on aggregate payments, when exceeds the basic limit.