Tds on payment to rites ltd

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2012 Rites Ltd. is a state government undertaking a PSU. Whether payments made to Rites Ltd for testing charges liable to deduction of Tax at Source?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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06 July 2012 Yes. TDS applicable u/s 194C @ 2%.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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06 July 2012 PSU is not the department or board under the control of Government.PSU is a company and TDS is deducted if payment is made to it for testing charges.

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CA Prashant Gupta

CA Prashant Gupta (Expert)
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06 July 2012 194 C don't exempt Govt companies and PSU. So you must deduct TDS

Querist : Anonymous

Querist : Anonymous (Querist)

07 July 2012 Thanx for the suggestions, but i think the deductions should be made u/s 194 J as testing and callibration charges are of professional nature??

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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07 July 2012 Rites Ltd charge testing charges based on quantity and these are not professional in nature. So section 194C is applicable.

CA Prashant Gupta

CA Prashant Gupta (Expert)
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07 July 2012 agree with Mr. Sanjay Gupta, moreover this is a contract so it is covered u/s 194 C.
in practical also when we deduct more TDS party will object so you must go for 194 C.