28 October 2007
Case ; The assessee is engaged in the business of sub contract of labour i.e he provides labour to main contractor.
Querry : The assessee makes a contract with other small contractors for supply of labour and the contract amounts of such exceeds Rs.50000/- thus making the assessee to make a sub sub contract. so is he liable to deduct the TDS on this contracts which are sub sub contracts
28 October 2007
TDS IS APPLICABLE FOR EACH CONTRACT ENTERED EXCEEDING RS. 20000 OR AGGREGATE OF RS. 50000 DURING A FINANCIAL YEAR . BUT FROM JUNE 2005 NO TDS IS DEDUCTIBLE UNDER 194 C IF FOLLOEWING CONDITIONS ARE SATISFIED FOR CARRIAGE CONTRACT. 1.CONSIDERATION FOR WORK CONTRACT IS PAID OR PAYABLE BY RESIDENT CONTRACTOR TO A RESIDENT SUB CONTRACTOR. 2.THE RESIDENT SUBCONTRACTOR IS AN INDIVIDUAL. 3.THE AFORESAID AMOUNTS ARE PAID OR PAYABLE TO SUBCONTRACTOR DURING COURSE OF BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGES. 4...... 5...... YOUR CASE DOES NOT FALL UNDER ABOVE. TAX IS DEDUCTIBLE UNDER 194 (C) (1) ONLY IF PAYMENT IS MADE IN PURSUANCE OF A CONTRACT BETWEEN A SPECIFIED PERSON AND A RESIDENT CONTRACTOR.THE SPECIFIED PERSON DOES NOT INCLUDE AN INDIVIDUAL. SO IN YOUR CASE IF THE SUBCONTRACTOR BEING A SPECIFIED PERSON IS AN INDIVIDUAL,194C DOES NOT APPLY. R.V.RAO
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