TDS on AMC charges
This query is : Resolved
06 August 2009
Dear Member,
Please clrify if AMC Charges Payable for the year 35000 whether TDs to be deducted. Payment made on 3 installement Rs. 10,000/- , Rs. 10,000/- & Rs. 15,000/-
Please clrify if AMC Charges Payable for the year 35000 whether TDs to be deducted. Payment made on 3 installement Rs. 10,000/- , Rs. 10,000/- & Rs. 15,000/-
06 August 2009
yes, as the single contract amount exceeds Rs. 20K as per sec 194C.
27 July 2025
Regarding **TDS on AMC (Annual Maintenance Contract) charges**:
---
### Key points:
1. **Section applicable**:
AMC charges generally fall under **contractual service** and are subject to TDS under **Section 194C** (for contracts related to transport, works, or supply of labor) or **Section 194J** (for professional or technical services), depending on the nature of AMC.
2. **Nature of AMC**:
* If AMC is for **maintenance of machinery/equipment**, it is considered a **technical service** and attracts TDS under **Section 194J @10%**.
* If AMC is more like a **contract for work**, it may attract TDS under **Section 194C @1% (for individual/HUF) or 2% (others)**.
3. **Threshold limits**:
* For **Section 194J**, TDS is to be deducted if payment exceeds Rs. 30,000 in the financial year.
* For **Section 194C**, threshold is Rs. 30,000 per contract.
4. **Installment payment**:
TDS should be deducted on each installment **if the installment exceeds the threshold**. Otherwise, accumulate the payments in the financial year and deduct TDS when the total crosses the limit.
---
### Example for your case:
* AMC amount: Rs. 35,000 for the year.
* Paid in 3 installments: Rs. 10,000, Rs. 10,000, Rs. 15,000.
* Since each installment is less than Rs. 30,000, no TDS is required on the first two installments.
* On payment of Rs. 15,000 (3rd installment), total paid crosses Rs. 30,000. So, TDS is to be deducted on the **entire Rs. 35,000** at that point.
---
If you want, I can help draft a simple note or calculation for this. Would that help?
---
### Key points:
1. **Section applicable**:
AMC charges generally fall under **contractual service** and are subject to TDS under **Section 194C** (for contracts related to transport, works, or supply of labor) or **Section 194J** (for professional or technical services), depending on the nature of AMC.
2. **Nature of AMC**:
* If AMC is for **maintenance of machinery/equipment**, it is considered a **technical service** and attracts TDS under **Section 194J @10%**.
* If AMC is more like a **contract for work**, it may attract TDS under **Section 194C @1% (for individual/HUF) or 2% (others)**.
3. **Threshold limits**:
* For **Section 194J**, TDS is to be deducted if payment exceeds Rs. 30,000 in the financial year.
* For **Section 194C**, threshold is Rs. 30,000 per contract.
4. **Installment payment**:
TDS should be deducted on each installment **if the installment exceeds the threshold**. Otherwise, accumulate the payments in the financial year and deduct TDS when the total crosses the limit.
---
### Example for your case:
* AMC amount: Rs. 35,000 for the year.
* Paid in 3 installments: Rs. 10,000, Rs. 10,000, Rs. 15,000.
* Since each installment is less than Rs. 30,000, no TDS is required on the first two installments.
* On payment of Rs. 15,000 (3rd installment), total paid crosses Rs. 30,000. So, TDS is to be deducted on the **entire Rs. 35,000** at that point.
---
If you want, I can help draft a simple note or calculation for this. Would that help?
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