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Tds on labour charges

vijay (article assistant) (116 Points)

08 January 2016

payament of rs.500000 made for supply of labour. Bill of rs.500000 has been bifurcated into 5 bills of rs.10000 each..Is tds applicable, though the each bill of rs.10000 not exceeds limit of rs.30000

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6 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 08 January 2016

if paid to single contractor / person / entity - YES

if paid to different contractor / person / entity - NO

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 08 January 2016

Assuming the amount paid as 50k (not 5 lacs), TDS not applicable if 5 different bills (even from the same service provider) for 10k are received since the aggregate does not exceed 75k and single bill value does not exceed 30k. Hence provisions of 194C not applicable in this case.

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Vishal Goel (Chartered Accountant) (1688 Points)
Replied 08 January 2016

Agree with Poornima
If the payment that is being made to the contractor does not exceed Rs. 30,000, No TDS on payment to contractor is required to be deducted. However, if the total of all such payments made or to be made during a financial year exceeds Rs. 75,000; TDS shall be deducted under Section 194C.

Niraj Bista (A/C) (70 Points)
Replied 08 January 2016

Of course TDs should be deducted at the point of time when the limited amount of 75000 as per 194C exceeds to each person. In your case amount is 100000 so u need to deduct TDs, even though bills are bifurcated into 5 pieces, otherwise expense will be disallowed.

bhuvanesh mohan (ca) (22 Points)
Replied 08 January 2016

Assuming you paid Rs 50000.00 divided in five bills of Rs.10000.00 each then you are not liable to deduct the tax as single limit is Rs.30000.00 per bill and in total Rs. 75000.00

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bhuvanesh mohan (ca) (22 Points)
Replied 08 January 2016

Assuming you paid Rs 50000.00 divided in five bills of Rs.10000.00 each then you are not liable to deduct the tax as single limit is Rs.30000.00 per bill and in total Rs. 75000.00