TDS on 194C threshold

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This discussion clarifies the TDS deduction requirements under Section 194C of the Income Tax Act. It explains that TDS must be deducted if a single contract payment exceeds £30,000 or if the aggregate payments for a contract throughout the financial year exceed £100,000. Importantly, if GST is shown separately on an invoice, it is not included when calculating the taxable amount for TDS purposes.

Mahesh S M

Mahesh S M (Querist)
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31 August 2024 if I pay to DHL 1,20,000/- including GST of 35,000/- should I deduct TDS though taxable amount didn't exceed the 1lakh limit?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 August 2024 You need to deduct TDS (u/s. 194C IT act) as the Single payment limit of Rs. 30K has exceeded.

Mahesh S M

Mahesh S M (Querist)
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31 August 2024 No sir, it is not a single payment but aggregate total of FY.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 August 2024 TDS shall be deducted u/s 194C in the following cases:

Particulars Amount
Single payment of a contract Exceeds Rs. 30,000
Aggregate payment of a contract Exceeds Rs. 1,00,000

Check if you do not exceed any limit .... (GST when specified separately, is not included)

Mahesh S M

Mahesh S M (Querist)
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01 September 2024 Suppose aggregate taxable amount is 95,000 and GST is 14000 total amount will be 100900. Should I deduct TDS in this case

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 September 2024 If GST is separately added, then no TDS liability.

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