SECTION 194C: TDS ON PAYMENTS TO CONTRACTOR

SECTION-194C: TDS ON PAYMENTS TO CONTRACTOR

SECTION 194C: TDS ON PAYMENTS TO

Section 194C  say that TDS is deducted by any person who is making any payments to a Resident Person who is carrying our any WORK in terms of the contract between the SPECIFIED PERSON and the resident contractor.

WORK includes :

  1. Advertising
  2. Carriages of goods/passengers by any mode of transport except Railway
  3. Broadcasting and Telecasting
  4. Catering
  5. Manufacturing/Supplying a product based on the requirement and specification by customer using the material purchased from the customer. It does not includes when the material purchased from any person other than the customer.

SPECIFIED PERSON

The ‘specified person’ mentioned above means the following –

  • The Central or State Government;
  • The local authority;
  • The Corporation established by the Central, State or Provincial Act;
  • The Company;
  • The Trust;
  • The Co-operative Society;
  • The registered Society;
  • The authority engaged either for the purpose of dealing with and satisfying the need for the housing accommodation or for planning, improvement or development of cities, town and village;
  • The university established / incorporated by Central, State or Provincial Act;
  • The firm;
  • The Government of a foreign state / a foreign enterprise or any association / body established outside India;
  • The individual or HUF liable to audit under section 44AB [Clause (a) or Clause (b)] during the financial year immediately preceding the financial year in which the sum is credited or paid to the account of the contractor. It is mention here that the term ‘contract’ includes ‘sub-contract’.

RATE OF DEDUCTION

Payment made or credited  to an Individual or HUF : 1%
Payment made or credited  to Person Other than an Individual
or HUF
: 2%
If PAN is not furnished than                                                           : 3%

CONDITION OF DEDUCTION

  • The amount paid or credited to the contractor in a single contract exceeds Rs.30000/
  • The aggregate amount paid or credited to the contractor during the financial year exceeds Rs.100000/

Return filing requirements –

Every Deductor deducting TDS in terms of section 194C is required to file a quarterly return in Form 26Q within following due dates –

Months Due date
April to June31st July
July to September31st October
October to December31st January
January to March31st May

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  1. Deepak
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