Tds deduction on labour charges

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aishwaryajagadish (Querist)
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28 June 2012 Dear Sir,

I know that, TDS has to be deducted at 2% on payment of labour charges generally. But if labour charges are relating to alteration work for agricultural machineries, is there any provision in Income tax which allows us not to deduct TDS @ 2% on such payments.

Please clarify.

Thanks & Regards

Chandrika

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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28 June 2012 Unless and otherwise any exemption is provided for non deduction, TDS is to be deducted on all kind of payment for works contract.
There is no exemption for works contract relating to agricultural machine as it is not exempt income and chargeable to tax.
Accordingly, TDS should be deducted @2%

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B Ravi Kumar ACMA, MBA, M Com

B Ravi Kumar ACMA, MBA, M Com (Expert)
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28 June 2012 TDS is applicable.

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