special case of tds

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vijay singla

learner

208 Points Posted on 02 January 2011

Contractor raised a bill of Rs 100000/- aand a company deducted tax u/s 194c @ 2%. beside this company also deducted a architect fee to be paid to architect with which seperate contract is made by company. while co will make payment of deducted amount to architect does co require to deduct the tds on this payment. as company has already deducted tax on rs 100000/-. co is simplly a middle man.

Exp.

bill amount 100000/-

deduction

tds 2000(2% on Rs 100000/-)

architect fee 20000/-

net payment rs 78000/-

Replies (2)

U S Sharma

glidor@gmail.com

21670 Points Posted on 02 January 2011

Originally posted by : vijay singla
	Contractor raised a bill of Rs 100000/- aand a company deducted tax u/s 194c @ 2%. beside this company also deducted a architect fee to be paid to architect with which seperate contract is made by company. while co will make payment of deducted amount to architect does co require to deduct the tds on this payment. as company has already deducted tax on rs 100000/-. co is simplly a middle man. Exp. bill amount 100000/- deduction tds 2000(2% on Rs 100000/-) architect fee 20000/- net payment rs 78000/-

if the company has made "seperate agreement with architect" then why the main contractor added the amount in his bills?

sanjay

FCA

310 Points Posted on 02 January 2011

if the company has made a separate agreement with the architect then contractor bill should have been passed at Rs. 80000 only and tds wopuld have been deducted on Rs. 80000 only

now if contractor bill has been passed at Rs. 100000 which is inclusive of architect fee then architect may be asked to raise the bill in the name of contractor. and company would pay the architect Rs. 20000 less tds on behalf of contractor and should deposit the tds on 20000 on behalf of TAN no. of contractor or should release the TDS amount to contractor for depositing it and to be shown in its tds return against PAN no. of architect.