tds on contract
This query is : Resolved
03 June 2009
if amount paid to any party during a financial year exceeds rs 10 lacs will surcharge be imposable while deducting tax at source
03 June 2009
If it is individual/HUF then yes, it is imposable. In case of partnership firm/company, this limit is 1 cr.
03 June 2009
will the surecharge be imposable even if his income doent exceed rs 10 lacs and what will be the retification procedure if the tds return for all the four quaters has already been filed
03 June 2009
1. Rate of surcharge on income-tax
(a)In the case of individual, HUF, AOP and BOI, the rate of S.C. is @ 10% I.T. , where the income or the aggregate of such incomes (i.e. referred to in sections given in the chart) paid or likely to be paid and subject to the deduction exceeds Rs. 10,00,000;
b) In the case of artificial juridical person referred to in section 2(31)(vii), the rate of S.C. is @ 10% of I.T.;
c)In the case of firm and domestic company,the rate of S.C. is @ 10% of I.T., where the income or the aggregate
of such incomes (i.e referred to in sections given in the chart) paid or likely to be paid and subject to the deduction exceeds Rs. 1,00,00,000;
d)In the case of company other than a domestic company,the rate of S.C. is @2.5% of I.T., where the income or the aggregate
of such incomes (i.e referred to in sections given in the chart) paid or likely to be paid and subject to the deduction exceeds Rs. 1,00,00,000;
As per above bare reading you don't need to apply for surcharge. Just fully make sure the total income does not exceeds the limit prescribed.
In case if surcharge is applicable then you need to file the correction statement for the relevant Qtr's. The details procedure is given at www.tin-nsdl.com have a look.
(a)In the case of individual, HUF, AOP and BOI, the rate of S.C. is @ 10% I.T. , where the income or the aggregate of such incomes (i.e. referred to in sections given in the chart) paid or likely to be paid and subject to the deduction exceeds Rs. 10,00,000;
b) In the case of artificial juridical person referred to in section 2(31)(vii), the rate of S.C. is @ 10% of I.T.;
c)In the case of firm and domestic company,the rate of S.C. is @ 10% of I.T., where the income or the aggregate
of such incomes (i.e referred to in sections given in the chart) paid or likely to be paid and subject to the deduction exceeds Rs. 1,00,00,000;
d)In the case of company other than a domestic company,the rate of S.C. is @2.5% of I.T., where the income or the aggregate
of such incomes (i.e referred to in sections given in the chart) paid or likely to be paid and subject to the deduction exceeds Rs. 1,00,00,000;
As per above bare reading you don't need to apply for surcharge. Just fully make sure the total income does not exceeds the limit prescribed.
In case if surcharge is applicable then you need to file the correction statement for the relevant Qtr's. The details procedure is given at www.tin-nsdl.com have a look.
03 June 2009
Agree
04 June 2009
the total income as said above by mr . chetan means what whether it refers to payment made to party providing contractual service or it means income for the purpose of filing income tax return
27 July 2025
Great question! Here’s a clear explanation regarding **TDS surcharge on contract payments** and how the “total income” is interpreted:
---
### 1. **When is surcharge applicable on TDS?**
* **Surcharge on TDS is applicable only if the *income* of the deductee exceeds specified limits.**
* The surcharge rates and thresholds differ based on the deductee’s status:
| Deductee Type | Surcharge Rate | Income Threshold for Surcharge to Apply |
| ----------------------------------- | -------------- | ------------------------------------------------------- |
| Individual / HUF / AOP / BOI | 10% | Income > Rs. 10,00,000 |
| Firm / Domestic Company | 10% | Income > Rs. 1,00,00,000 |
| Company other than Domestic Company | 2.5% | Income > Rs. 1,00,00,000 |
| Artificial Juridical Person | 10% | Applies irrespective of income (per section 2(31)(vii)) |
---
### 2. **What does “income” mean here?**
* The *“income”* refers to the **total income of the deductee (the party receiving the payment)** as computed for Income Tax purposes, **not the amount paid in the contract or payments made by the deductor**.
* So, surcharge is applicable **only if the deductee’s total taxable income exceeds the threshold**, regardless of how much you have paid them during the year.
* **It is not based solely on the amount paid under the contract or the TDS amount.**
---
### 3. **If you already filed TDS returns without surcharge but it was later found applicable, what to do?**
* You need to **file a correction statement (TDS correction return) for the relevant quarter(s)** to revise the TDS amount including surcharge.
* The procedure to file correction statements is available on the official portal [TIN-NSDL](https://www.tin-nsdl.com).
* Make sure you have the deductee’s PAN and correct income details to correctly calculate surcharge.
---
### 4. **Summary**
| Your Query | Explanation |
| ------------------------------------------------ | --------------------------------------------------------------------- |
| Is surcharge applicable if payment > Rs.10 lakh? | No, surcharge depends on deductee’s income, not payment amount alone. |
| What if deductee’s income < Rs.10 lakh? | No surcharge to be deducted in that case. |
| How to correct TDS returns for surcharge? | File correction statements on TIN-NSDL site. |
---
If you want, I can help you draft the process for filing correction returns or calculate surcharge for a given deductee. Would you like that?
---
### 1. **When is surcharge applicable on TDS?**
* **Surcharge on TDS is applicable only if the *income* of the deductee exceeds specified limits.**
* The surcharge rates and thresholds differ based on the deductee’s status:
| Deductee Type | Surcharge Rate | Income Threshold for Surcharge to Apply |
| ----------------------------------- | -------------- | ------------------------------------------------------- |
| Individual / HUF / AOP / BOI | 10% | Income > Rs. 10,00,000 |
| Firm / Domestic Company | 10% | Income > Rs. 1,00,00,000 |
| Company other than Domestic Company | 2.5% | Income > Rs. 1,00,00,000 |
| Artificial Juridical Person | 10% | Applies irrespective of income (per section 2(31)(vii)) |
---
### 2. **What does “income” mean here?**
* The *“income”* refers to the **total income of the deductee (the party receiving the payment)** as computed for Income Tax purposes, **not the amount paid in the contract or payments made by the deductor**.
* So, surcharge is applicable **only if the deductee’s total taxable income exceeds the threshold**, regardless of how much you have paid them during the year.
* **It is not based solely on the amount paid under the contract or the TDS amount.**
---
### 3. **If you already filed TDS returns without surcharge but it was later found applicable, what to do?**
* You need to **file a correction statement (TDS correction return) for the relevant quarter(s)** to revise the TDS amount including surcharge.
* The procedure to file correction statements is available on the official portal [TIN-NSDL](https://www.tin-nsdl.com).
* Make sure you have the deductee’s PAN and correct income details to correctly calculate surcharge.
---
### 4. **Summary**
| Your Query | Explanation |
| ------------------------------------------------ | --------------------------------------------------------------------- |
| Is surcharge applicable if payment > Rs.10 lakh? | No, surcharge depends on deductee’s income, not payment amount alone. |
| What if deductee’s income < Rs.10 lakh? | No surcharge to be deducted in that case. |
| How to correct TDS returns for surcharge? | File correction statements on TIN-NSDL site. |
---
If you want, I can help you draft the process for filing correction returns or calculate surcharge for a given deductee. Would you like that?
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