Sec 194c : incone tax
This query is : Resolved
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
(Expert)
27 November 2013
Once TDS is deducted from B.No.1 then you should deduct TDS on Bill No. 2 also.
.
This simple reply can have its support in the proviso to Section 194C(5).
.
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.
.
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)
.
"Likely" does not have any certainty, though you may have a strong view that there will be no 3rd Bill.
.
So, it's better to deduct TDS to avoid the un-liked "likely" litigation.
.
.
This simple reply can have its support in the proviso to Section 194C(5).
.
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.
.
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)
.
"Likely" does not have any certainty, though you may have a strong view that there will be no 3rd Bill.
.
So, it's better to deduct TDS to avoid the un-liked "likely" litigation.
.
Aditya Maheshwari
(Expert)
27 November 2013
second bill TDS not required to be deducted.
13 March 2014
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