TDS

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This discussion clarifies when Tax Deducted at Source (TDS) is required for payments made to contractors under Section 194C. TDS is not mandatory if the single payment to a contractor does not exceed £30,000 and the total payments within the financial year do not exceed £100,000. Therefore, in this case, where the total bill was £50,000 split into two payments each under £30,000, TDS was not required.

Pooja Abraham

Pooja Abraham (Querist)

13 January 2020 I paid a vendor against a single, total bill of 50k, for which I gave an advance and then later the remaining payment, each less than 30k. Do I have to file TDS on this?

This transaction falls under payment to a contractor (194C).

CA Mohit Bansal

CA Mohit Bansal (Expert)

13 January 2020 Hi Pooja, Please specify the nature of transaction

Pooja Abraham

Pooja Abraham (Querist)

13 January 2020 I am extremely sorry, but I'm new to the jargons, what does 'nature of transaction' here mean?

CA Mohit Bansal

CA Mohit Bansal (Expert)

14 January 2020 I mean type of payment, nature of expenditure, rent, contractual or against purchases?

Pooja Abraham

Pooja Abraham (Querist)

14 January 2020 It is a payment to a contractor.

CA Mohit Bansal

CA Mohit Bansal (Expert)

15 January 2020 Under the following circumstances for contractual payments, TDS is not required to be deducted –

1. The amount paid or credited to the contractor in a single contract doesn’t exceed INR 30,000.

2. The aggregate amount paid or credited during the financial year doesn’t exceed INR 1,00,000.

Hence in the instant case the TDS is not required to be deducted. I hope your query gets solved here. Should you have further query in the matter, please contact on the email id for timely response.

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