Originally posted by : Faiz Ahmed | ||
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X & Co. (Firm) engaged in wholesale business assigned a contract for construction of its godown building to Mr. Ravi, a contractor. It paid Rs.25,00,000 to Mr. Ravi as Contract Payment. Please tell me which one of the following is correct ? a) As the payment is made to Company then it comes under 194C, payment to contractors other than HUF or Individual and so 2% on the payment will be deducted as TDS. Rs.25,00,000 * 2% = 50,000/- b) The same 2% is applicable along with Education Cess & SHEC ? Rs.25,00,000 * 2.3% = 57,500/- Which one of the above amounts is correct as TDS deduction ? Thanks & Regards ! |
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TDS is deducted on the basis of payee.
Hence, should be deducted @ 1%. Since, payee is individual.
Also, EC & HSEC shouldn't be deducted on TDS. It has to be adjusted by payee in its advance tac & sat.