When to deduct tds

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2012 Dear Sir
i made payments rs 25000/- 2nd 25000/- and 40000/- to contractor(company) now my query is how much TDS is to be deducted ? and what is implication for further payments ?

CA Manish Agrawal

CA Manish Agrawal (Expert)
Follow

29 June 2012 As per Sec 194C the maximum limit is Rs. 75000 in a year and Rs. 30000 for single invoice. Here in the given case payment of Rs. 90000 has been to contractor which is more than the specified limit of Rs. 75000/- Therefore you are required to deduct tax on Rs 90000/- @ 2%. On further payment you can deduct tax on whole amount even which are paid earlier.