T.D.S. - Solution urgently required.

This query is : Open

Sumitr (Querist)
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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)
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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)
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02 September 2008 It means This case is of non compliance of TDS Provision

CA E.A.Ravikumar

CA E.A.Ravikumar (Expert)
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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