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Tds

PANKAJ MISHRA (MANAGER ACCOUNTS & FINANCE) (222 Points)

29 August 2016

What is TDS deduction liability in the case of proprietorship business. is there any turnover based limit or else.? Mr. Sharma is runniing proprieter ship business and his turnover is Rs.42 Lacs for the fin yr 15-16 he paid salary to staff which attracts tds and payment to contractors. Is he lible to deduct tds on payment to staff salary and payment to contractors.

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Deepak Gupta (CA Student) (15922 Points)
Replied 29 August 2016

An individual is exempted from deducting TDS under section 194A/C/H/I/J, if tax audit was not applicable during the F.Y. immediately preceding the F.Y. in which income is paid/credited.

[Reference: Proviso to Sec. 194A(1), Explanation(i)(l)(B) to Sec. 194C(7), Second Proviso to Sec. 194H, Second Proviso to Sec. 194I, Second Proviso to Sec. 194J(1).]

So, in case of payment to contractors, if tax audit was applicable to Mr. Sharma during F.Y. 2014-15, then TDS shall be deducted if the payment crosses the prescribed threshold.

But no such exemption criterion is available in case of section 192. TDS shall be deducted in any case, if the salary paid exceeds the basic exemption limit.

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