TDS on Incentive to Labour Contractor
Vipul Acharya (Account Officer) (647 Points)
22 May 2020
Is TDS applicable on Invoice raised against Incentives paid to labour contractor
3 Replies
P-SAC
(Partner)
(152 Points)
Replied 22 May 2020
Dear Sir,
It will step in same shoes of labour contractor. Same section 194C.
Asha Kanta Sharma
(Manager - Finance & Accounts)
(36355 Points)
Replied 22 May 2020
Under Section 194C you have to deduct TDS as mentioned below if you are making a one time payment exceeding Rs. 30,000/- or in aggregate yearly exceeds Rs. 100,000/-
Rate of TDS u/s 194C
When provisions of section 194C of the Income Tax Act gets attracted, the Deductor is required to deduct TDS at the following rates –
| Particulars | Rate of TDS |
| Payment made / credited to an individual or HUF | 1% |
| Payment made / credited to a person other than an individual or HUF | 2% |
However, in case the PAN is not furnished, the Deductor would be liable to deduct TDS @ 20% i.e. at the maximum marginal rate.
Pradeep Gupta
(Accounts Manager)
(298 Points)
Replied 23 May 2020
Section 194C states any person responsible for paying 'ANY SUM"... that means it includes all types of payment.
Hence if it exceeded the threshold limit then TDS should be deducted.
Hence if it exceeded the threshold limit then TDS should be deducted.
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