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Contract Labour

Chetan D. (Management Accountant) (89 Points)

02 September 2009

Dear All,

I have a querry on contract labour. Suppose we have taken a contract of labour. Now if he is producing the bill as follows:

Labour Charges RS 100

PF (Employer's Contribution) Rs 12

Hence Total Rs 112

My querry is whether i should deduct TDS on Rs 112 or RS 100 only? And any basis or case law for reference?

Thank you in advance

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9 Replies

Vidisha (PRACTISING CA) (172 Points)
Replied 02 September 2009

nly on 100

PF is exempt from tds u/s 192

Chetan D. (Management Accountant) (89 Points)
Replied 02 September 2009

Originally posted by :vidisha
"	nly on 100 PF is exempt from tds u/s 192	"

Thanks VIDISHA. I think you are saying it about salary TDS. Is it applicable for contract labour also?

Chetan

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 02 September 2009

Chetan

There is difference between Contracted Labour & contract of labour . In first case you are taken labour on contract basis & ther is contract between company & Labour & in this case Labour charges ie. Rs. 100 is laiable for TDS . In second case contarct of Labour , ther is contract between company & the contarctor who provides labour to company. In this whatevr charged by the conatractor in his bill all the amount are laible for TDS . In second case contractor is liable for PF of labour & this amount also includes in the contracted amount.

Hope u hav no doubts....

1 Like

Vidisha (PRACTISING CA) (172 Points)
Replied 02 September 2009

oops!!!!!!!!! its 194 c..........again only on 100

Chetan D. (Management Accountant) (89 Points)
Replied 02 September 2009

Originally posted by :Vidisha
"	oops!!!!!!!!! its 194 c..........again only on 100	"

But any supporting or reference for only Rs 100

Vidisha (PRACTISING CA) (172 Points)
Replied 02 September 2009

ya its a deduction u/s 80c

Vidisha (PRACTISING CA) (172 Points)
Replied 02 September 2009

i mean pf is a deduction

Chetan D. (Management Accountant) (89 Points)
Replied 02 September 2009

Originally posted by :Sorabh Gupta
"	Chetan There is difference between Contracted Labour & contract of labour . In first case you are taken labour on contract basis & ther is contract between company & Labour & in this case Labour charges ie. Rs. 100 is laiable for TDS . In second case contarct of Labour , ther is contract between company & the contarctor who provides labour to company. In this whatevr charged by the conatractor in his bill all the amount are laible for TDS . In second case contractor is liable for PF of labour & this amount also includes in the contracted amount. Hope u hav no doubts....	"