Sec 194c : incone tax

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Rushabh Sharedalal (Querist)

27 November 2013 Considering the limits of Rs 30000 per individual bill and 75000 in aggregate for Contractor what will be the treatment of TDS Deduction if there are only 2 bills of the contractor for the year:- Bill Num 1 -Rs 35000 Bill Num 2 -Rs 15000. Will we deduct TDS on the second bill or not?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

27 November 2013 Once TDS is deducted from B.No.1 then you should deduct TDS on Bill No. 2 also.
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This simple reply can have its support in the proviso to Section 194C(5).
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TDS is required to be deducted when aggregate of amount of such sums credited or paid or LIKELY TO BE CREDITED OR PAID during the FY exceeds Rs.75000.
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While making the Second payment of 15000/-
the "LIKELY TO BE CREDITED OR PAID" fiction starts to comes into effect (as you will move towards crossing the limit)
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"Likely" does not have any certainty, though you may have a strong view that there will be no 3rd Bill.
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So, it's better to deduct TDS to avoid the un-liked "likely" litigation.
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Aditya Maheshwari

Aditya Maheshwari (Expert)

27 November 2013 second bill TDS not required to be deducted.

Abhishek Ranjan Singh

Abhishek Ranjan Singh (Expert)

13 March 2014 Now you can ask your query in online chat. without paying anything or becoming member.
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