TDS on Contract payments - Please help

TDS 869 views 1 replies

A Company is hiring contract labour through a man-power supply agency at an agreed rate. Because of non-availability of ESI registration for the agency, the Company is deducting ESI on behalf of the agency and remitting it. By this virtue, whether those employee will be deemed to direct contract employees and hence whether TDS deduction is applicable as per 192 or even in such case, considering the contract for supplying man-power, whether TDS is deductible u/s-194C??

Please reply.

Replies (1)

Well as far as i know.. TDS concept arises for this reason 'why do you make the payment'. So since the agency is not an employee of yours but is merely a contractor sec 194 C is applicable.. compliance with other acts does not have change the nature of the transaction and your relationship with this entity.. hence TDS is still applicable u/s 194 C


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