TDS applicability on extended warranty charges

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This discussion explores whether Tax Deducted at Source (TDS) applies to extended warranty charges for laptops, particularly when these charges are bundled into the main invoice. While some argue it's capitalised with the laptop cost, others contend it's a separate contract requiring TDS under Section 194C. The advice suggests reviewing the purchase order; if warranty costs aren't itemised, treat them separately and deduct TDS.

Lakshmi

Lakshmi (Querist)
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06 July 2023 Urgent !

Is TDS applicable for the extended warranty charges for the Laptop which is included in the invoice and not as separate invoice/ contract?

Thanks in advance!

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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06 July 2023 No. It gets capitalized with the laptop acc.

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Lakshmi

Lakshmi (Querist)
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06 July 2023 But in the audit office, they stress that warranty charges is a contract and we have to deduct TDS u/s 194c.

Kindly advise.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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06 July 2023 It is general practice to capitalize the initial cost of laptop with extended warranty when the separate bill for warranty is not issued by supplier.
Check your purchase order, if it doesn't include the total cost, then treat the warranty charges separately and deduct TDS over it.

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