tds
This query is : Resolved
06 March 2009
whether Tds is applicable on inuaguration expenses for new office
06 March 2009
Your question is not clear. Please specify what expenditure you have incurred and also the details payee & payer.
07 March 2009
its for dinner expenses n the assessee is pvt ltd co n the the person to whom pay is made is proprietory concern so whether it will attract 194 c clause amt paid is 4lacs
27 July 2025
Got it! Here’s a clear answer for your query:
---
### Is TDS applicable on inauguration (dinner) expenses paid to a proprietor for Rs. 4 lakhs?
**Yes, TDS is applicable under Section 194C (Payment to Contractors)**
**Reasoning:**
* Section 194C covers payment to contractors or for carrying out any work (including supply of labor for carrying out any work).
* Even though the payment is for inauguration dinner expenses, if it’s considered as **contract work** or **service** (like event management, catering, or supply of food and related services), it falls under Section 194C.
* Since the payee is a **proprietorship concern**, TDS is applicable at the rate of **1%** if they have a PAN, else **20%**.
---
### What you should do:
* Deduct TDS @1% on Rs. 4,00,000 = Rs. 4,000 (if PAN available).
* Deposit the TDS and issue Form 16A to the proprietor.
* File TDS returns accordingly.
---
### If you do not deduct TDS
* The company (payer) will be liable to pay interest and penalty.
* The expense may be disallowed under section 40(a)(ia) in income tax assessment.
---
If you want, I can help draft a simple TDS deduction letter or assist with other formalities. Would you like that?
---
### Is TDS applicable on inauguration (dinner) expenses paid to a proprietor for Rs. 4 lakhs?
**Yes, TDS is applicable under Section 194C (Payment to Contractors)**
**Reasoning:**
* Section 194C covers payment to contractors or for carrying out any work (including supply of labor for carrying out any work).
* Even though the payment is for inauguration dinner expenses, if it’s considered as **contract work** or **service** (like event management, catering, or supply of food and related services), it falls under Section 194C.
* Since the payee is a **proprietorship concern**, TDS is applicable at the rate of **1%** if they have a PAN, else **20%**.
---
### What you should do:
* Deduct TDS @1% on Rs. 4,00,000 = Rs. 4,000 (if PAN available).
* Deposit the TDS and issue Form 16A to the proprietor.
* File TDS returns accordingly.
---
### If you do not deduct TDS
* The company (payer) will be liable to pay interest and penalty.
* The expense may be disallowed under section 40(a)(ia) in income tax assessment.
---
If you want, I can help draft a simple TDS deduction letter or assist with other formalities. Would you like that?
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