Tds on payment to rites ltd


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Querist : Anonymous

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Querist : Anonymous (Querist)
06 July 2012 Rites Ltd. is a state government undertaking a PSU. Whether payments made to Rites Ltd for testing charges liable to deduction of Tax at Source?

06 July 2012 Yes. TDS applicable u/s 194C @ 2%.

06 July 2012 PSU is not the department or board under the control of Government.PSU is a company and TDS is deducted if payment is made to it for testing charges.

06 July 2012 194 C don't exempt Govt companies and PSU. So you must deduct TDS

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Querist : Anonymous

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Querist : Anonymous (Querist)
07 July 2012 Thanx for the suggestions, but i think the deductions should be made u/s 194 J as testing and callibration charges are of professional nature??

07 July 2012 Rites Ltd charge testing charges based on quantity and these are not professional in nature. So section 194C is applicable.

07 July 2012 agree with Mr. Sanjay Gupta, moreover this is a contract so it is covered u/s 194 C.
in practical also when we deduct more TDS party will object so you must go for 194 C.


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