16 July 2014
I had querey regarding TDS on which Amount should be calculated... For ex: 194c states TDS for Contractor is 1% & 2% respectively.if payment in excess of 75000 P.A., my doubt is how to consider this point and how to make TDS. That means After exceeding 75000 only i should deduct TDS., Please clarify me this point., THANKS IN ADVANCE
16 July 2014
Hi, if the credit or the payment in pursuance of the contract does not exceed Rs.30,000/-, no deduction has to be made at source. However , if the aggregate of all amounts paid/credited or likely to be paid/credited exceeds Rs. 75,000/- then tax at source is to be deducted. Example Bright shops ltd. Has paid following sums to Shivam (individual) for contract of telecasting work. Date Payment 12/5/2013 18000 22/7/2013 22000 21/12/2013 18000 1/2/2014 10000 22/2/2014 10000 No liability upto 1/2/2014 as no sum exceeds 30000 limit. Liability of Bright Shops ltd for TDS deduction under Section 194C arises on last payment on 22/2/2014 as the aggregation of sum paid during the year exceeds 75000. As deductee is individual, TDS rate will be 1 %. TDS on Contracts deduction will be 780 (78000*10%). Payment for sum of 22nd feb , 2014 will be 10000-780 = 9220
So if the transactions with the party crosses 30K in single bill(payment) then also u have to deduct TDS u/s 194C. And of course after 75K in the year.
CAclubindia
