TDS on Labour Payment

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This discussion clarifies the rules for Tax Deducted at Source (TDS) on labour payments. The consensus is that a 1% TDS deduction is correct for labour supply contractors, even if the payment is under Rs 1 lakh. For accounting purposes, a single voucher is sufficient to record the payment, especially when made via cheque, even if the labourer hasn't provided a bill.

Santosh

Santosh (Querist)
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28 May 2020 Hi,

Made a payment of Rs 99000 after deducting TDS for the amount charged 100000 to the labour.
Labour PAN has Individual. the TDS 1% which we have deducted is correct...?. And he has not given bill for this, so how to account it ? do we need to make vouchers for the payment amount.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 May 2020 Yes 1% deduction is right if he is a labour supply contractor. In such a case make voucher for the payment.

Santosh

Santosh (Querist)
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28 May 2020 Hi Sir... thanks for your answer. should i need to make seperate vouchers for the amount below 10000 till the total amount or I can create a self single voucher for the amount 99000...?

Santosh

Santosh (Querist)
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28 May 2020 Payment has been made through cheque.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 May 2020 Single voucher is enough for cheque payment.

Santosh

Santosh (Querist)
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28 May 2020 Ok sir thank you very much....!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 May 2020 Welcome..................