Applicability of tds u/s 194c

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This query is : Resolved

CA Santosh Dhumal (Querist)

13 June 2016 Provision Sec 194 C is as follows,
(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 contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to—
(i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;
(ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family,
of such sum as income-tax on income comprised therein.
However the Circular no 01/2014, service tax portion has been excluded from the deduction of Tax, provided same is mention sepreately on the invoice.

Further, "No deduction shall be made from the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor, if such sum does not exceed [thirty] thousand rupees" .
Since ST is also payable to the Party, so whether to determine the THL of (Rs.30000/75000), the ST has to be be considered?
(Just to determine the applicability and not for deduction).

Rupesh Jain

Rupesh Jain (Expert)

13 June 2016 TDS will deducted on the basic amount not on the total value of the invoices, or make payment which ever in earlier

CA Santosh Dhumal

CA Santosh Dhumal (Querist)

13 June 2016 But in the given case Total Invoice Amount is 32060 out of Service Value us Rs.28000, where as sevice tax Rs.4060, so total amount credited to the Party Rs.32060. so whether TDS will attracted on 28,000 portion?

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

13 June 2016 From 01.06.2016 threshold limit Increased to Rs.100000/- u/s 194C , Bill or Payment exceed Rs.30000/- even TDS attract on Net but bill or Payment Value Exceed Rs.30000/- so you have to deduct TDS