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Tds if amt exceeds ceiling or at ceiling?

CA P KARTHIKA (Chartered Accountant) (715 Points)

09 June 2009

Anybody tell me yaar if any payment to any supplier within the conditions exceeds Rs. 20000 in a single cheque or cash payment or arises on due basis then Tax is deductible at source?

If the payment exceeds 20000 tds is applicable!

If the payment is just Rs.20000/- is tax deductible at source ?

Regards,

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10 Replies

Shyam Lal Naik (Service) (6156 Points)
Replied 09 June 2009

You are taking about Sec 194C.

Payment to suppliers are not liable to TDS under this section.

TDS is applicable for payments to contractors/sub-contractors. It is applicable if the value of the contract exceeds Rs. 20K.

There is an alternative test. If the value of the indivisual contract does not exceed Rs. 20K, but the total payments, for all contracts, exceeds Rs. 50K, TDS needs to be deducted for all contracts.

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CA P KARTHIKA (Chartered Accountant) (715 Points)
Replied 10 June 2009

Just clarify me shyam!

Supposing if the payment to a contractor during a financial year is Rs. 20000/-

Is TDS deductible for him?

Shyam Lal Naik (Service) (6156 Points)
Replied 10 June 2009

If the payment is just Rs. 20K, TDS not deductible.

Satish (CA Final Student) (479 Points)
Replied 10 June 2009

Karthika, if the payment of Rs. 20000/- is a single payment, TDS is applicable. But if the payment is against various bills, TDS is not required to be deducted. If it is advance against services to be rendered, definitely TDS is applicable. According to shym, what he says is correct since the wordings are 'exceeding 20K' But on the safer side, u should deduct the TDS if its a single payment for a single contract.

CA P KARTHIKA (Chartered Accountant) (715 Points)
Replied 11 June 2009

Ok satish thanks for clarifying me! So Tds needs to be deducted for Rs. 20000/- payment made to a person in a financial year!

Thanks Yaar!

Regards,

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CA P KARTHIKA (Chartered Accountant) (715 Points)
Replied 11 June 2009

Ok satish thanks for clarifying me! So Tds needs to be deducted for Rs. 20000/- payment made to a person in a financial year!

Thanks Yaar!

Regards,

Ajay Chaudhary (CA) (63 Points)
Replied 11 June 2009

TDS is applicable If the single pymt for the contract exceeds Rs. 20000/- . Upto Rs. 20000/- TDS need not to be deducted.

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 11 June 2009

The section says if the sum does not exceed Rs. 20,000/- then no TDS deductible. So if single payment if Rs. 20,0001/- then TDS deductible otherwise not provided yearly total does not exceed Rs. 50,000/-.

Satish (CA Final Student) (479 Points)
Replied 11 June 2009

Ajay & Aditya, u r absolutely correct my friends. Thats what I wrote in my earlier messege. The actual provision says so. But since it is a payment it might be an advance against a bill amounting exceeding 20,000/-. What Karthika asked was the payment & not credit. So while making advance sometimes the payer may or may not know the amount of final bill. So on the safer side, while making payment if it is 20K, one should deduct the tax at source. If the payment is against the bill, the tax would have been deducted earlier at the time of giving credit.