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This query is : Resolved

P MURUGAN (Querist)

22 October 2018 Sir,

1.A bakery shop who constructs another commercial bakery shop in another location for which payment made to contractors towards labour charges and supply of material ( Cement, stone and soil) .

My query is that Is TDS to be deductible for these payments from the contractor? If TDS was not deducted from the contractor, then what problem arises on the side of income tax?

Anand

Anand (Expert)

23 October 2018 In my opinion TDS under 194C is deductible on the payment made to the contractor, if the bakery shop is an entity liable to deduct TDS. If the shop is owned by an Individual, HUF, AOP or BOI - then it needs to deduct TDS only if it was not liable to tax audit in the immediately preceding financial year.
Otherwise all other entities would require to deduct tax.
the consequence is that if detected, the bakery will be held to be an assessee in default, and tax equalling the tax to be deducted plus interest for delayed deduction will be levied and demanded from the assesee.

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