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TDS On Capital Expenditure/Payment

This query is : Resolved 

I want to know that TDS is appilcable only on revenue payment or it is applicable for revenue or capital payment both. please give full reference like case laws , notification and circular.

TDS is applicable to both the payments, if the nature of payment falls within the purview of TDS sections. There is no doubt or controversy on that issue.

Hi... TDS is applicable only to Payments to Expenses but not for payments to Assets.

Read the section.. then u will know..

Dear Experts,

Can we please get a clear idea about the same???


The chapter of TDS does not make a distinction between capital payments and revenue payments.

If the payment falls withinh the scope of the Section, TDS shall be deducted.

For instance, TDS u/s 194C is to be deducted on payments made to a contractor.

Construction of a building is a capital expenditure, but TDS is required to be deducted on such expenditure.

So, nature of expense is to be seen and not whether it is capital or revenue.

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