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Tds on buidling material

vinod (sales) (56 Points)

05 June 2012

Please tell me How much TDS Deduct on Building Material & Eelctricity Meterial. Applicable or not , if applicable thewn how much ?

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4 Replies

ashish gupta ( student) (1922 Points)
Replied 05 June 2012

TDS is not deductible on purchase of material

CA Saiyum khan (Practicing CA) (685 Points)
Replied 05 June 2012

TDS is not dedcutible of purchase of building material. It is deductible only on labour portion. However if contract is given with material then TDS would be deductible on whole amount.

CA Atul (Tax Manager) (294 Points)
Replied 05 June 2012

SECTION 194C (Deduction of tax at source - Payment to contractors)

Payments to RTCs - Section 194C can be applied qua payments made by a State Road Transport Corporation to private bus owners, from whom buses are hired for plying on specified routes.

—Circular : No. 558, dated 28-3-1990.

Guidelines pursuant to Supreme Court decision - In view of the Supreme Court decision in Associated Cement Co. Ltd. v. CIT [1993] 201 ITR 435, the CBDT has issued the following guidelines in regard to the applicability of the provisions of section 194C :—(note that most of these observation is now inserted in new section 194C applicable from 01.10.2010 given at the end of the post)

The provisions of section 194C shall apply to all types of contracts for carrying out any work including, transport contracts, service contracts,(some professional & technical service contract covered in section 194J now) advertisement contracts, broadcast ing contracts, telecasting contracts, labour contracts, material contracts and works contracts.
No deduction at source under section 194C shall be required to be made in the consideration for the contract does not exceed the prescribed amount which at present is Rs. 10,000.(now 20000 and from 01.07.2010 30000)
The provisions of section 194C would not apply in relation to payments made for hiring or renting of equipments, etc.(these services are now covered in 194I now)
The provisions of section 194C would not apply in rela tion to payments made to banks for discounting bills collecting/receiving payments through cheques/drafts, opening and nego tiating Letters of Credit and transactions in negotiable instru ments.
Service contracts would be covered by the provisions of this section since service means doing any work as explained above.

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Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 06 June 2012

No TDS shall be applicable. The respective state VAT and CST will be applicable, whatever be the case.

As correctly pointed out by Saiyum Khan, if the whole portion of procuring materials is part of a contract, then TDS u/s 194C shall be deductible on the whole portion.