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hi

Abansal ( Manager) (121 Points)

03 November 2009

hi all,.

my company has taken a DG set on hire from a company and is paying hire charges to it every month , earlier the company was having a TDS exemption certificate from IT dept of 3% , so we were deducting TDS @ 3% . Now, after 1st oct as the law itself says the TDS on P& M @ 2%. so shall we deduct the TDS @ 3% or 2% .

kindly advise?

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3 Replies

PRAVEEN KUMAR (MBA (Finance) B.Com.(P)) (3443 Points)
Replied 03 November 2009

ask the vendor if he is providing certificate from IT deparment for lower rate of Deduction otherwise deduct 2%.

Thanks

PRaveen

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 03 November 2009

Aashima

As you told that you have taken an exemption certificate from IT Deptt that u have deduct TDS @ 3% , this notification has come effect when rate is 10% /20% . But now rate itself is 2% so you must deduct TDS @ 2% becasue exemtion certifcate is applicable by considering an assumption that other provision will remains same.

In this context you can communicate to IT deppt. to amend your exemption certificate.

Furthur i will tell you another example based on ur query............Let say "A" is tranporter & providing transport service to many companies. But "A" take an certificate from IT depptt for LOWER RATE OF TDS deduction . But now provison has been changed w.e.f 01/10/2009 that if transporter provides the PAN no. then no TDS .

In that case "A" must opt for providing PAN because provosion of income tax act automaticaaly gives relaxation to assesse........

Hope you have no doubts..........