SECTION 194C TDS

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This discussion clarifies the application of TDS under Section 194C for contractor payments. Even if individual bills are below the £30,000 threshold, TDS must be deducted if a single payment to the contractor exceeds £30,000. The deduction is applicable at the time of payment, not when the liability is created. Failing to deduct TDS can lead to disallowance of the expense in the relevant financial year.

Deepak Jain Salecha

Deepak Jain Salecha (Querist)
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15 January 2021 WE HAVE RECEIVED BILLS OF CONTRACT RS 15000 ON 30-04-2019 RS 25000 ON 31-05-2019 AND WE HAVE MADE PAYMENT RS 45000/-(SINGLE CHEQUE) ON 31-07-2019 .WHETHER WE ARE REQUIRED TO DEDUCT TDS U/S 194C IF YES THEN WHEN AND WHY AND THE AMT ON WHICH TDS IS REQUIRED TO BE DEDUCTED.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 January 2021 As single payment exceed 30,000 TDS applicable on 45,000.

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Deepak Jain Salecha

Deepak Jain Salecha (Querist)
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18 January 2021 RESPECTED SIR,IF I HAVE RECEIVED BILLS OF CONTRACT ON 15/03/2019 RS 15000/- AND RS 25000/-ON 30-03-2019 FROM A SINGLE CONTRACTOR AND BOTH CONTRACTS ARE SEPRATELY ENTERED. I HAVE MADE NO PAYMENT UPTO 31-03-2019 AND MY BOOKS OF ACCOUNTS HAS BEEN AUDITED U/S 44AB. IN F.Y. 19-20 I HAVE MADE PAYMENT OF RS 45000/- ON 15-04-2019 WHETHER I WILL BE REQUIRED TO DEDUCT TDS U/S 194C AND IF YES,THEN TIME WHEN IT IS TO BE DEDUCTED AND WHAT WILL HAPPEN IF I DONT DEDUCT TDS SINCE THIS EXPENSE HAVE ALREADY BEEN ALLOWED IN F.Y. 18-19 AUDIT AND WHAT IS THE RESPONSIBILITY OF AUDITOR OF F.Y. 18-19

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 January 2021 As on 31st March iability created for 2 bills less than 30,000 each TDS provisions not applicable.
TDS provisions applicable in April when single payment exceed 30000.

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