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Tds on contract

Indrakumar KS (Sr.Accounts /Finance Executive) (72 Points)

03 May 2017

We are an exporter Unit. We are getting service from Container Corporation of India Ltd. Whether we have to deduct TDS. Or if government provide services to us. is it tds can be deducted or not

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6 Replies

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 03 May 2017

TDs U/s 194C deducted on Contract if annual payment exceeds Rs.1,00,000/- & amount of single payment exceeds Rs. 30,000/- thrn TDS is required to deducted on date of payment or issue of cheque whichever is earlier.

Rate of TDS is 1% for Individual or HUF & 2% for others. However Individual or HUF not required to deduct TDS if they are not liable to audited i.e. gross turnover doesn't exceeds Rs.2 crore & gross receipts doesn,t exceeds Rs. 50,00,000/- as the case may be.

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Indrakumar KS (Sr.Accounts /Finance Executive) (72 Points)
Replied 04 May 2017

Dear Sir.

Thank you for your reply but my question is IF SERVICES PROVIDED BY GOVT COMPANIES' is it we have to deduct TDS

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 04 May 2017

yes u have to

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 04 May 2017

Deduction of TDS in case of composite contractWhere materials are supplied by the government, the question is whether deduction will be made with reference to gross payment to the contractor or the net payment, i.e., gross payment minus deductions, if any,On account of materials supplied by the government, will have to be decided in the light of the terms of the particular contract and the conduct of parties thereto.Where the contractor has undertaken to construct a building or a dam,and the government or other specified person has undertaken to supply all or any of the materials necessary for the work at the stipulated prices, the deduction will be related to the gross payment without excluding any adjustments on account of cost of materials.

Pankaj rawat (B.Com) (15 Points)
Replied 08 May 2017

DEAR ALL,

I HAVE A DOUBT, WILL TDS BE APPLICABLE ON FIRST BILL WHERE THE LIMIT IS EXCEEDING ON SECOND BILL NOT ON FIRST BILL & WILL WE HAVE TO DEDUCT TDS ON EVERY FUTURE BILL WHETHER LIMIT EXCEEDS OR NOT AFTER SECOND BILL DEDUCTED TDS. IF TOTAL PAYMENT DOES NOT EXCEEDS 1LAKH IN A FINANCIAL YEAR UNDER 194C (PAYMENT TO CONTRACTORS)

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CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 08 May 2017

If your bill amount is more than Rs.30000/- then u have to deduct TDS on it.

If not exceed then you have to deduct it in the bill when total payment exceeds Rs.100000/- on total payment.