Sec 194c : incone tax

This query is : Resolved

Rushabh Sharedalal (Querist)
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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)
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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)
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27 November 2013 second bill TDS not required to be deducted.

Abhishek Ranjan Singh

Abhishek Ranjan Singh (Expert)
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13 March 2014 Now you can ask your query in online chat. without paying anything or becoming member.
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