contract of work Vs. contract of Sale ; Tds on Rent

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J S PATEL (Querist)
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06 January 2011 1>

we have a client who entered with an agreement with contractor to laying pipelines for home connection for gas distribution. In contract they mentioned the particular rate for one connection which incusive of both material and labour.they did not mention seprately labour rate and material rate. i.e 3800 for one connection incuding both labour and material.But contractor raised bill seprately for labour and material. i.e 1900 for labour and 1900 for material. Now i have query that on which amt we have to deduct the tax i.e on 3800 0r 0n 1900 for labor portion only. please reply urgent.

2>

we have a client who has taken certain buildings on rent for 35000 monthly rent. annualy 420000 but he deduct the tds only after payment exceeds 180000 then he deduct tax on whole amt which was not deducted upto 180000 pymt. Is it correct? I think rather he should deducted tds from the first payments onwards ? whether i am correct or not? please reply urgent.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 January 2011 1. You have to deduct TDS on the amount of labour charges bill and treat the material bill as if purchases made by you. Separate
cheques may be issued by you for material as well as labour.
Further, if work is carried out at the residence of assessee, which is a personal expenditure, is not liable for TDS deduction.

2. You are correct but he is not wrong.

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