Vishal (CA Final.) (77 Points)
20 April 2011
Anumanchipalli Sathikonda
(Tax Consultant)
(1559 Points)
Replied 21 April 2011
Mr.Vishal
The word "contract" in the context of Section 194C can be said to be an agreement between two persons for carrying out any work or service. The person who agrees to carry out the work or render service is the contractor. The contract between the contractor and the contractee need not be in writing.
In light of the above explanation you can indentify whether an agreeemnt between two person is a contract. When you have identify that there exists a contract in that agreement, you an apply the tests- such as quantum of payment or aggregate payemnts and the status of the contractor. When the test is finished you will know at what rate you have to deduct tax or need not deduct tax.
Smilarly there need not be any written agreement between a land lord and tenent.
Best Wishes
Sathikonda
Landmark Judgments: Important Provisions of the EPF & ESI Act interpreted by the Honorable Supreme Court of India