My question is whether payment made to Contractor after deducting TDS u/s 194C is to be at the rate of 1% or 2% .The contractor is providing services in the name of the firm but the PAN number given by the firm belongs to an Individual and here payment is made after deducting TDS at the rae tof 1 percent. Is this right?
1 Replies
CA. Subhash Dangi
(Chartered Accountant)
(1784 Points)
Replied 21 August 2012
PAN of Partnershil should be obtained for deducting the TDS. PAN in personal or individual name should not be quoted of obtained for deduction of any TDS by clients as it is unlawful.
It is not clear from ur quiry that whether the firm is partnership firm or proprietorshipconcern.
It it is proprietorship concern, then your action is correct.
If it is partnership firm, the benefit of credit of TDS will go to Individual but not to the Firm. Therefore the TDS @ 1% by obtaining PAN belongs individual is not correct.
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