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question

Abansal ( Manager) (121 Points)

05 October 2009

hi,

our one of the retainer whose gross total incom for the whole year is less than 1.6 lacs pa, we are deducting TDS on contractor from his fees ever month.

now is it so tat if we accept 15G form from him, our liability to deduct TDS from his fees is finished.

i mean is form 15 G applicable for fees also or it is just limited to banks only?

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3 Replies

Satish (CA Final Student) (479 Points)
Replied 05 October 2009

Hi Aashima, Form 15G is restricted to banks only. Check out Form No. 13 if covers your category. if yes, your retainer needs to apply it to ITO TDS to get the certificate for no deduction or lower deduction. Once he gets the certificate from ITO TDS, he will submit to you & then no need to deduct tax from ur side. But if form 13 does not cover ur retainers category, there is no alternative and u need to deduct tax.

Krutesh Patel (ACA) (727 Points)
Replied 05 October 2009

15G certificate can only be issued for Paymants made u/s 194A and cann't be issued for any more

Juzer Sadikot (CA - innovative solutions for Imports and Exports) (1309 Points)
Replied 05 October 2009

Dear Aashima,

Section 194C(3) of I T Act provides for certain cases where the Deduction of Tax at source is relaxed which are as under;

(3) No deduction shall be made under sub-section (1) or sub-section (2) from—

[(i) the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor or sub-contractor, if such sum does not exceed twenty thousand rupees:

Provided that where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year exceeds fifty thousand rupees, the person responsible for paying such sums referred to in sub-section (1) or, as the case may be, sub-section (2) shall be liable to deduct income-tax 80[under this section:]

Provided further that no deduction shall be made under sub- section (2), from the amount of any sum credited or paid or likely to be credited or paid during the previous year to the account of the sub-contractor during the course of business of plying, hiring or leasing goods carriages, on production of a declaration to the person concerned paying or crediting such sum, in the prescribed form82 and verified in the prescribed manner and within such time as may be prescribed, if such sub-contractor is an individual who has not owned more than two goods carriages at any time during the previous year:

Provided also that the person responsible for paying any sum as aforesaid to the sub-contractor referred to in the second proviso shall furnish to the prescribed income-tax authority or the person authorised by it such particulars as may be prescribed in such form and within such time as may be prescribed;

Rule 29D of IT Rules priscribed the procedure and form claiming benefit of 194(3)(i)

Form of declaration under second proviso/third proviso to section 194C(3)(i)*.

29D. (1) The declaration under the second proviso to clause (i) of sub-section (3) of section 194C by a sub-contractor shall be in Form No. 15-I and shall be verified in the manner indicated therein by such sub-contractor.

(2) The declaration referred to in sub-rule (1) may be furnished to the contractor responsible for paying or crediting any sum to the account of the sub-contractor before the event of such sum being credited or paid to such sub-contractor.

(3) The particulars under the third proviso to clause (i) of sub-section (3) of section 194C to be furnished by a contractor responsible for paying any sum to such sub-contractor shall be in Form No. 15J.

(4) The particulars referred to in sub-rule (3) shall be furnished,—

(i) to the Commissioner of Income-tax, so designated by the Chief Commissioner of Income-tax, within whose area of jurisdiction, the office of the contractor referred to in sub-rule (3) is situated;

(ii) on or before the 30th June following the financial year.]

In case above does not work for you apply in form 13 as provided in Rule 29C and try getting order of AO under Section 197 of IT Act.

Thanks