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Purchase contract

CA Raghavender (CHARTERED ACCOUNTANT) (305 Points)

10 July 2009

Hai !All

Wn any company enter in contract with a person for purchase of material(which is used for house cleaning purpose), whether TDS Provisions aplicable or not?

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9 Replies

RITESH KOTHARI (B.COM, FCA, DISA(ICAI)) (778 Points)
Replied 10 July 2009

TDS PROVISION WILL BE APPLICABLE AS YOU ARE NOT CAPITALISING THAT EXPENSE.YOU WILL TREAT IT AS YOUR INDIRECT/DIRECT EXPENDITURE IN P&L A/C.THUS U/s 194C TDS WILL BE DEDUCTED @ 2%+SURCHARGE (IF APPLICABLE)+ CESS

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RAJU (LEARNER) (1089 Points)
Replied 10 July 2009

Provisions of Section 194C are not applicable for supply of materials.

(Guest)

Hi Raghu,

TDS will not be aplicable.

CA Raghavender (CHARTERED ACCOUNTANT) (305 Points)
Replied 10 July 2009

Thanks Tinku fr ur reply

ok I agree with you but

It is contract for supply of material, so that I hv doubt it may be TDS applicable..seeking fr anothers openion

ca tarun sharma (SERVICE) (277 Points)
Replied 10 July 2009

tds is required to be deducted in case of contract of providing any specified services and not for supply of any material, goods or capital assets like building, land therefore tds is not required to be deducted

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Yadab (CA Student) (26 Points)
Replied 10 July 2009

according to my knowledge it TDS should be deducted @ 2%+surcharge..because the contractor is supplying material..if the contractor is supplying material and labour thenTDS should be deducted @ 4% + surcharge...(Job contract)

(Guest)

If company have only purchasing a material and does not levy service tax in the bill thn it's simply transaction of purchase and sale, thus no need to deduction of TDS on that ok.

But in other case, bill contains service tax and amount is exceed to Rs.20000/- thn you should to deduct TDS @ 2.060%.