TDS on Work Contracto

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This discussion clarifies TDS applicability on advance payments for work contracts under Section 194C. If the total contract value exceeds the Rs. 30,000 threshold, TDS is applicable on the full amount. However, if the primary purpose is goods supply and installation is secondary, TDS might not apply to the supply portion if the Rs. 30,000 threshold isn't met. Professional advice is recommended for specific cases.

Vipul Acharya

Vipul Acharya (Querist)

05 July 2021 Paid Rs. 1 Lakh advance against Supply & Installation Works, as per PI Rs. 100000 to be paid for supply and 15000 for Installation

Is TDS to be deducted on the same, this could be the first and last transaction with vendor

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

06 July 2021 TDS under section 194c applicable on advance payment as it's works contract.

Vipul Acharya

Vipul Acharya (Querist)

06 July 2021 At what amount TDS to be deducted at Rs.115000 or Rs. 15000

Kindly guide

And as the threshold not crossed still tds to be deducted ?

Vipul Acharya

Vipul Acharya (Querist)

06 July 2021 At what amount TDS to be deducted at Rs.115000 or Rs. 15000

Kindly Guide

And as the threshold not crossed still tds to be deducted ?

Deepa B

Deepa B (Expert)

06 July 2021 If the transaction is covered under section 194C and consolidated contracted price for the work agreed is Rs.1,15,000/-. Then threshold limit of Rs.30,000/- prescribed under Section 194C per contract has exceeded. Hence liable to deduct tax on Rs.1,15,000/-
But if the principal object of contract is sale of goods and contract for work is supplementary then this section won't apply on value of goods i.e., Rs.100,000/-. In that case TDS will not be attracted as threshold of Rs.30,000/- has not been exceeded.
It is better to seek professional opinion with complete details of the transaction

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