TDS on labour work

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This discussion clarifies whether Tax Deducted at Source (TDS) applies when labour and material costs are presented separately on a single bill. The consensus is that if the total bill exceeds £30,000, TDS is applicable, even if the labour component alone is below this threshold. It's advised to issue separate bills for material and labour to avoid potential issues, as a combined bill might be treated as a works contract, making TDS mandatory on the total amount less the material value.

Smrity

Smrity (Querist)

08 July 2023 In a job work where the material and labour are shown seperately in a single bill , total bill amount is 46 k but the labour chgs are below 22k k, should the tds be deducted considering the threshold of 30 k for 1 bill ,

Or not to deduct TDS as the labour chgs are below 30k

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

08 July 2023 No need to deduct TDS.

RAJA P M

RAJA P M (Expert)

08 July 2023 Better to get separate bills for material and Labour charges... Otherwise it's considered as works contract and TDS to be deductible.

Manish

Manish (Expert)

08 July 2023 The exclusion of value of material is for tax deduction only not for ascertaining applicability.
TDS applicable because sum is above 30k.
TDS will be on 46k less value of material.

Smrity

Smrity (Querist)

10 July 2023 Thank you all for your reply

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