Is TDS has to be deducted on Capital payments
This query is : Resolved
27 June 2008
A Company has given a contract to Contractor for construction of office building for Rs.10 lakhs. Is it company has to be deduct the TDS on contract charges?
27 June 2008
Yes..company has to deduct TDS on contract charges at the rate of 2.06% or 2.26%
27 June 2008
Yes,
U can devide the material & service charges, like Centring work & material, profession fee for building design, painting work, labour work.
If the contractor is suppling the material and submitting the bill then the TDS is not applicable on material supply, or else 2.266% will be charges on 10L.
U can devide the material & service charges, like Centring work & material, profession fee for building design, painting work, labour work.
If the contractor is suppling the material and submitting the bill then the TDS is not applicable on material supply, or else 2.266% will be charges on 10L.
27 June 2008
contract expenses should be capitalized in relation to building construction and not effected on revenue in nature. So if company has not be deduct TDS on Contract charges, there is no disallowed of contract charges u/s 40a(ia) (because of these expenses are not reflected on P/L a/c or Income and Expenditure a/c)
Kindly reply proper comment of the above
Kindly reply proper comment of the above
21 October 2008
To Us it is the capital expenditure, but for the contractor it is an income & Revenue cent percent the TDS to be deducted on contract on building
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