TDS - 194C - ADVT. CONTRACT
This query is : Resolved
ragavendhiran
(Querist)
30 April 2008
Please clarify :-
As per Income tax provision, if payment to contractor exceeding Rs.20000/-(single payment) or 50,000/- (one year), we will deduct TDS 1% with applicable sc & cess for Advt. contract. As per circular no 715 reimbursement expenses can not be deducted out of the bill amount.
If one company pay the entire advt. exp (say Rs. 250000) and reimburse from other group companies in share basis. If the share of the one company exceed the minimum amount which is not required to deduct TDS ( say Rs. 55,000).
What amount to be deducted as TDS for the Main company (entire amount or his portion) and Partipating company for its payment of Rs. 50000/- ?
As per Income tax provision, if payment to contractor exceeding Rs.20000/-(single payment) or 50,000/- (one year), we will deduct TDS 1% with applicable sc & cess for Advt. contract. As per circular no 715 reimbursement expenses can not be deducted out of the bill amount.
If one company pay the entire advt. exp (say Rs. 250000) and reimburse from other group companies in share basis. If the share of the one company exceed the minimum amount which is not required to deduct TDS ( say Rs. 55,000).
What amount to be deducted as TDS for the Main company (entire amount or his portion) and Partipating company for its payment of Rs. 50000/- ?
Shyam Lal Naik
(Expert)
30 April 2008
Payment is made by the main company to the contractor in pursuance of a contract between the main company and the contractor. The main company should deduct the entire amount of tds.
The arrangement between the group companies is basically apportionment/allocation of joint expenses and can not be treated as a payment in pursuance of a contract and hence does not fall within 194C's net.
How ever, looking forward to more views.
The arrangement between the group companies is basically apportionment/allocation of joint expenses and can not be treated as a payment in pursuance of a contract and hence does not fall within 194C's net.
How ever, looking forward to more views.
30 April 2008
the main (Paying company) should deduct TDS and can take credit for the same.
The liability to deduct tds is of payer and not of the cost center.
The liability to deduct tds is of payer and not of the cost center.
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