TDS ON CONTRACTS

Save Share

This query is : Resolved

Quick Summary

This discussion clarifies TDS deductions on contract payments under Section 194C. It addresses the standard rates of 1.5% or 0.75% and the exemption limits of Rs 30,000 (single) or Rs 100,000 (aggregate). The key point of contention is whether the exemption limit, especially when a lower deduction certificate is provided (e.g., Rs 550,000 at 0.30%), includes GST. The consensus is that TDS should be calculated on the basic amount, exclusive of GST, and that the exemption limit applies to the basic value of the contract.

K BHEEMA REDDY

K BHEEMA REDDY (Querist)

29 December 2020 Dear sir,
My doubt is as per Sec 194C tds will be deducted on contract payments @ 1.5% or 0.75% if exemption limit Rs 30000 for single contract or Rs 100000 for aggregate exceeded,

Here one of my vendor is submitted lower deduction rate certificate for deducting TDS at lower rate. (exemption limit amount is Rs 550000 tds rate will be @ 0.30%.)

Here how we are calculate limit amount Rs 550000, whether it is including GST (or) will be considered only basic.

Thanks in advance,
Regards,
Bheema Reddy.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

29 December 2020 Only on basic Assassee would have applied lower deduction u/s 197
Department given approval 550000/_ value limit or time limit , you have to obtain details 550000/_ billing details exemption given for total 550000/
Deducted should check limit already utilised or billed for other vendor check in traces how much already benefit enjoyed if it already get relaxation in other vendor than you need to deduct at full 0.75 or 1.5% ,benefit utilisation should be check since tds department given relaxation on 550000 on basic on billing not for individual vendor

K BHEEMA REDDY

K BHEEMA REDDY (Querist)

30 December 2020 Dear sir,
Thank u for your previous reply.
Assume the particular vendor is billing invoice only to our company and here my doubt is the limit of Rs 550000 is inclusive of gst or exclusive of gst.

Thanks in adance
Regards,
Bheema Reddy

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

01 January 2021 Tds should be deducted Exclusive of GST .

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now