Can some one explain the 'Threshold" funda.Contractor "X" is submitting a bill for Rs 29900, NO TDS RT?
He submits another bill for Rs.10000, then also no TDS Rt?, He submits a 3rd bill for Rs.30000. Now how TDS is to be levied.
I f this threshold is to be followed, then a contractor keeps on submitting bills say on 7 occasion and ech bill is valued at 10,000. Then What is the provision for TDS. If the same contractor submits 7 bills valued at 76000 each bill less than 15000, then what...
If aggregate of such bills exceeds 75,000 in a fy then u need to deduct tax on gross total amount u/s 194C.
@ Tushar That was very fast. Well, oour case is in a financial year we pay 74900 till december. Then, suddenly we have to pay him Rs.500 in january. In that it crosses the threshold limit of 75000, so the tax comes to Rs.754.(1%). In this case how can we deduct tax. What I am doing is deducting tax the moment it crosses 30000 and ask the contractor to claim if does not cross the threshold limit...
Can u please advise..
Sometimes one can foresee the amount of bills from a party in a given financial year. If all the bills amount is likely to cross 70,000/- in the financial year then deduct TDS from the first bill itself. Conservative estimation of the accountant is required, and the party should not mind if TDS is deducted on the aggregate bills amounting to less than 70,000/- in a financial year.
the moment is crosses the threshold limit in any case u have to deduct tds from the total value of 70,000 and not 754 which you described.
CAclubindia
