TDS

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Anoop.D.V

Anoop.D.V (Querist)
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07 March 2011 'A' company has entered in to an annual maintenance contract of Rs. 60000/- with 'B'comapny for the financial year 2010-11. Payments where made by the A company on April 2010 and February 2011, Rs. 30000 each. Whether TDS is to be deducted for the entire contract amount?

Presently the comapny has not deducted the tax.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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07 March 2011 Yes TDS needs to be deducted as the value of the contract exceeds Rs. 30000/-

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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07 March 2011 1) Since each payment is Rs.30,000/- only, section 194C(5) attracts meaning thereby no need to deduct tax.
2) As per proviso to the said section, since the aggregate payment does not exceed Rs.75,000/-income tax need not be deucted.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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07 March 2011 Payment in April 2010--Amount Rs 30000/- attracts TDS as threshold limit till 30.06.2010 is Rs 20000/- single payment. The revised limit of Rs 30000/- (Single bill) & Rs 75000/- (Annual Payment) is from 01.07.2010

Further the value of the annual maintenance contract is Rs 60000/-. If single bill given in that case TDS needs to be deducted on Rs 60000/- if multiple bills below Rs 30000/- is given in that case TDS is required to be deducted only on payment made in April 2010.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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07 March 2011 Gupta Ji is correct. Overlooked the amendment and to that extend I stand corrected.

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