Tds deduction limit

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Vishnu (Querist)
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03 July 2012 A person is running a business and he monthly pays an amount to Security agency.He pays an amount aprrox to Rs.20,000/- through cheque.

Could any one tell me whether he has to deduct Tds ,if so
what is the limit of the amount upto which he can pay without.
Can he pay the amount either through cheque or cash.Is there any specific method.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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03 July 2012 sECURITY AGENCY IS A CONTRACTOR AND TDS IS REQUIRED TO BE DEDUCTED U/S 194C.
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wHERE A SINGLE PAYMENT EXCEEDS RS 30000/- OR AGGREGATE PAYMENTS DURING A FINANCIAL YEAR EXCEED RS. 75000/- TDS IS REQUIRED TO BE DEDUCTED.
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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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03 July 2012 PAYMENT OF RS. 20000 OR MORE ARE TO BE MADE BY ACCOUNT PAYEE CHEQUES ONLY.
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CA Prashant Gupta

CA Prashant Gupta (Expert)
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04 July 2012 in your case, if person is giving 20,000 pm then he need to deduct TDS u/s 194C. as total payment in a year will be more than 75000/-
as payment is not in excess of 20000 so he can pay by cash or cheque as he like.
But it is advisable to issue account payee cheque

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