Hi all,
I have received a bill from one of my contractor he provides bill under his company (not proprietorship for sure) but he provides PAN No. of his self and asks me to make me the payment under his name including company name!! eg. XYZ company his name is abc cheque infavour of "ABC XYZ Company".
Now my question is whether i have to deduct tds contract under individiual 1% or Company 2% and
whether i can issue cheque in the favour as he requires??
thanks in advance,
regards,
Meyyappan.S
You have to deduct TDS @ 2% because the contractor is receiving payment on behalf of the company , i.e. you are indirectly making payment to the company so liability to deduct tax is 2% .
1. You have to deduct TDS @ 2% as payment treat as company, becoz bill in the name of company (contract threshold limit Rs.75,000/- per annum / single contract of Rs.30,000/-)
2. You have to issue cheque in the name of bill raised only & not both name.
CAclubindia
