TDS U/S 194C OF IT ACT

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PAWAN NARANG (Querist)
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14 June 2007 IF AN INDIVIDUAL WHOSE TURNOVER UPTO LAST YEAR WAS NOT 40 LACS BUT DURING THE CURRENT YEAR AT THE END OF FEB 2008 HIS TURNOVER EXCEEDS MORE THAN 40 LACS. WILL HE REQUIRED TO DEDUCT TDS.

PR Choudahry

PR Choudahry (Expert)
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14 June 2007 pl. specify the link with Sec 194 C & Auditable turnover

PAWAN NARANG

PAWAN NARANG (Querist)
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14 June 2007 according to section 194c normally individual & huf are not required to deduct tds but there is a situation that an individual or huf whose total sales turnover or gross receipts from business exceeds the monetary limit specified under section 44 ab during the financial year immediately preceeding the finanacial year in which income is to be credited , shall be liable to deduct tax.

mine query is that if in the previous year turnover exceed 40lacs but if in the current year in which tds is be deducted in that year turnover does not expected to exceeds 40 lacs . then is it a requirement to deduct tax.

Thanks

Pawan Narang

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CA PAVAN KUMAR

CA PAVAN KUMAR (Expert)
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16 June 2007 As such there is no point to consider the turnover for 194C.But, since the assessee is an individual he gets into the ambit of tds but not solely for 194C.So, he is reqd. to deduct tax at source if the contract payments cross the limit provided in the section.

Pankaj Jain

Pankaj Jain (Expert)
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18 June 2007 As per Section 194 C of the IT Act,1961, the liability to deduct tax at source arises if the turnover from business exceeds Rs. 40 Lacs in the preceding financial year. Since the figures for the preceding financial year determine an individual's liability to deduct tax at source, so if the figures in the preceding financial year do not exceed Rs. 40 Lacs, there is no liability even if gross sales in the current year is Rs. 1 Crore(for example).