T.D.S. - Solution urgently required.

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Sumitr (Querist)

02 September 2008 " U/s 194C No TDS is to be deducted where the Single payment or credit does not exceed Rs. 20000/- ans collectived the whole contract amount does not exceed Rs. 50000/- during he whole year. "

A party has taken embroidery job bills during the year with amount below Rs. 20000/- in each bill in the month of January 2008 and total of all the bills during the year does not exceeds Rs. 50000/-. Hence No TDS is deducted. but the party has made single payment of Rs. 47804/- in the month of February 2008 to embroidery job creditor.

Will this be a case of non compliance of TDS Provision.

CHEZHIYAN

CHEZHIYAN (Expert)

02 September 2008 194C(3) No deduction shall be made under sub-section (1) or sub-section (2) from-

(i) any sum credited or paid in pursuance of any contract the consideration for which does not exceed twenty thousand rupees; or

(ii) any sum credited or paid before the 1st day of June, 1972; or

(iii) any sum credited or paid before the 1st day of June, 1973, in pursuance of a contract between the contractor and a co-operative society or in pursuance of a contract between such contractor and the sub-contractor in relation to any work (including supply of labour for carrying out any work) undertaken by the contractor for the co-operative society.

CHEZHIYAN

CHEZHIYAN (Expert)

02 September 2008 It means This case is of non compliance of TDS Provision

CA E.A.Ravikumar

CA E.A.Ravikumar (Expert)

02 September 2008 TDS provisions lay emphasis on " Credit to account or payment, which ever is earlier"

In this case, credit seems to have happened first & that too within the prescribed limits.

Payment in lumpsum is only a corollary to the credit which has been given earlier.

Hence no non-compliance can be inferred