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Tds on manpower provider service (Income Tax)

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This query is : Resolved


( Author )
14 December 2011

Our company is taking manpower from ABC company and executed Manpower Provider Agreement. My question is; in which section our company deduct the TDS? and why?

ABC COMPANY IS NOT RECRUITMENT COMPANY. ABC company given to work but not want to show sub contractor that'w why excited Manpower Provider Agreement.


CMA. CS. Sanjay Gupta

( Expert )
14 December 2011

IN THE GIVEN CASE SEC 194C WILL BE APPLICABLE. NO OTHER OPTION.


Navin M Patel

( Author )
14 December 2011

Can we consider Professional Service (Manpower provide)and deduct TDS u/s 194J? because we don't want to show this works in sub-contract. If we deduct TDS u/s 194C its consider sub-contract. Please advice me?


CMA. CS. Sanjay Gupta

( Expert )
14 December 2011

Please clearly tell me exact nature of service provided and what kind of manpower provided, how payment made to manpower etc. to enable me to suggest anything.


Navin M Patel

( Author )
14 December 2011

OK....Our company has received Data Entry contract from Central Govt., As per agreement with Govt. we are not give said work to other person. We gave this works to ABC company, all assets like computer set, premises, electric bill, all admin exps. etc belong to my company. ABC company abstract manpower provider bill on monthly base (total entries done by Data Entry Operator in a month X Rate as per manpower provider agreement)


CMA. CS. Sanjay Gupta

( Expert )
14 December 2011

You have been given work contract. Now the Govt company will deduct TDS from you u/s 194C. Now you want to apply Sec 194J on ABC Company. You can if the ABC does not object to it. No problems with regards to income tax as you are deducting higher TDS i.e. 10% instead of 2%. So no hassles you can go ahead. Ask ABC to prepare the bill as Fees for data entry work.


Navin M Patel

( Author )
14 December 2011

Thank you very much. Almost I am clear about this. Last question. ABC company mention in its bill Manpower Service Charges not Manpower Service Fees. In that situation what we do? 194C or 194J


CMA. CS. Sanjay Gupta

( Expert )
14 December 2011

In that case section 194C will be applied but even if 194J is applied you will not face any problem as you are deduction higher rate of TDS.


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