CA.R.S.KALRA
Quick Summary
Update: Click here to check out the TDS Rate Chart for FY 2021-22. 194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contr
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FAQ :
Any person, other than an individual or HUF, making payments to a resident contractor or sub-contractor for work is responsible. Individuals or HUFs are liable if their business turnover or gross receipts exceed ₹1 crore (business) or ₹50 lakh (profession) in the preceding financial year.
Section 194C covers various works including advertising, broadcasting, telecasting, carriage of goods/passengers (excluding railways), catering, and manufacturing/supplying products as per customer specifications using their material. It also includes the supply of labour for works contracts.
The TDS rate is 1% if the payment is made to an individual or Hindu Undivided Family (HUF). For any other person, the rate is 2%. These rates are applicable before any surcharge or cess, and a 20% rate applies if the recipient's PAN is not provided.
TDS is not applicable if the payment to a contractor does not exceed ₹30,000 for a single instance or ₹1,00,000 in aggregate during the financial year. It's also not applicable for payments made exclusively for personal use or to goods carriage operators owning 10 or fewer vehicles, provided they furnish a declaration.
No, tax is not deducted on the 'GST on services' component if it is separately charged in the bill. This applies to IGST, CGST, SGST, and UTGST.
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