TDS in case of Work Contract
This query is : Resolved
23 November 2007
There is a back to back work contract agreement between a contractor and a sub contractor.The clause of agree. is that contractor will raise a bill of gross amt. to contractee. and out of the payment received from the contractee, the contractor will deduct a sum of Rs. 5% of amt. received(out of gross bill local taxes and TDS will be deducted) and than the balance will be paid to sub contractee. My query is on which amt. the contractor will deduct TDS and make a payment to sub-contractor(whether on gross amt or on the amt. to be paid tothe sub-contractee). and whether this 5% amt will come under the purview of Sec.194J.
23 November 2007
pls reply earliest
24 November 2007
Mr. Saurabh,
In my opinion:-
01. There is one main Contract on which the contracte will deduct TDS u/s. 194C(1)@ 2% + ....
02. There is a sub-contract for the value of 95% of the Main Contract. Contractor will deduct TDS u/s. 194C(2)@ 1% +.....
03. No body in case is paying any fees for professional or technical services. Section 194J will not be applied.
In my opinion:-
01. There is one main Contract on which the contracte will deduct TDS u/s. 194C(1)@ 2% + ....
02. There is a sub-contract for the value of 95% of the Main Contract. Contractor will deduct TDS u/s. 194C(2)@ 1% +.....
03. No body in case is paying any fees for professional or technical services. Section 194J will not be applied.
26 November 2007
Respected Sir,
By Mistake The section was wrongly quoted. The 5% amt. which i m taking about is regarding Commission and whetehr Sec. 194H will be attracted or not in thos case. pls reply
By Mistake The section was wrongly quoted. The 5% amt. which i m taking about is regarding Commission and whetehr Sec. 194H will be attracted or not in thos case. pls reply
28 November 2007
modified
30 November 2007
I do not think the deduction of profit margin in allotting sub-contract will fall under the category of commission.
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