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TDS

Anshul Agarwal (CA Final year student) (127 Points)

31 July 2008

DEAR SIR,

I AM MAKING PAYMENT FOR LUNCH TO A CONTRACTOR. IS TDS DEDUCTED ON THIS.

THANKS,

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7 Replies

Prem Kumar (Articled student--Final) (375 Points)
Replied 31 July 2008

no since it is reimbursement of the expenditure you need not deduct tds. If you are taking any service and you have to pay then you have to deduct tds as applicable

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Vidya (Student) (789 Points)
Replied 31 July 2008

Yes tax has to be deducted if any one payment to the vendor exceeds Rs.20,000/- or if the aggregate value of all the bills raised by the vendors exceeds Rs. 50,000/- in any one FY.

Please refer section 194C of the Income Tax Act for further details.

CA.Nikhil Gupta (PRACTICE) (768 Points)
Replied 31 July 2008

i agree with what vidya has said

vishwas (Account executive) (20 Points)
Replied 31 July 2008

Dear sir

Please send the 281 challan in excel format .

Rgds

Vishwas

S.Srinivasaraghavan (Chief Financial Officer and Co) (11318 Points)
Replied 31 July 2008

If it is a Purchase of food, no TDS. If it is a contract to make food as per specification in our premises, and supply at our premises, it is a composit contract and TDS is applicable

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Richa (CA) (63 Points)
Replied 01 August 2008

Yes

I agree with Vidya

Catering services are specifically included under section 194C. Hence TDS is required to be deducted if any single paymnet exceeds Rs. 20000/- or if the aggragate payment exceeds Rs. 50000/- during a year.

Further, I would advice that tax be deducted from the immediate payment itself if annual catering expenditure on estimated basis falls fairly above Rs. 50000/- (say 10000/- per month). This would save on interest for late deduction with retrospective effect.

CA RAMESH KUMAR AHUJA (CA, DISA, LLB) (5452 Points)
Replied 01 August 2008

Tax at source is not required to be deducted under any circumstances. The transaction is that of a sale only. Contractor is being paid for lunch sold.