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Cash Payment exceeding 2 lakhs rs to a contractor on which no tds under 194C is deducted.

Fluffy Chu (11 Points)

20 August 2018

Which tax provisions will be applicable?

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JAI BHOLA (504 Points)
Replied 20 August 2018

First of all section 269ST prohibits payment of more than 2 lakhs , for a transactions related to particular event , contravention of which shall result in penalties under relevant section , and further no TDS deduction means getting your expences disallowed .

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rama krishnan (12239 Points)
Replied 20 August 2018

269st doesn't prohibit payments but it prohibit receipt. section 269st will attract in the hands of contractor. section 40a(ia) or sec 40A(3) will attract in the hands of payer

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Fluffy Chu (11 Points)
Replied 20 August 2018

thanks. I had confusion over section 269ST. Cash payments are not included but cash receipts are. therefore provisions of 269ST won't affect the assessee but the contractor will have to pay penalties.

CA Bhavik Soni (867 Points)
Replied 21 August 2018

Only 30% expenditure will be disallowed. And if the person collect the CA certificate regarding taxability of said income in his return, then not a single rupee will be disallowed.

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