06 July 2009
This query is related to TDS on Mobilisation. Mr. A is a Govt. Contractor. The Govt. has advanced Mobilisation Advance to the Contractor. This Advance gets adjusted in prospective bills on some reasonable basis. Mr. A the Contractor has to pay interest @ 12% on such Advance to the Govt. Here is it required to Deduct Tax by the Govt. for Mr. A ??
06 July 2009
Any person responsible for paying any sum to any resident (hereinafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and
(a) the Central Government or any State Government; or
(b) any local authority; or
(c) any corporation established by or under a Central, State or Provincial Act; or
(d) any company; or
(e) any co-operative society; or
(f) any authority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or
(g) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or
(h) any trust; or
(i) any university established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956) ; or
(j) any firm; or
(k) any individual or a Hindu undivided family [or an association of persons or a body of individuals, whether incorporated or not, other than those falling under any of the preceding clauses], whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor,
shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to
(i) one per cent in case of advertising,
(ii) in any other case two per cent,
of such sum as income-tax on income comprised therein:
Remarks : the case falls under the clause a of the Section 194C,therefore advance received from the govt will be eligible for deduction of TDS.
CAclubindia
