Tds on works contract u/s 194c

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CA Himanshu Binani (Querist)
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25 May 2012 bill value is total rs 5,00,545/- which comprises of material - 432435 & labour- 68110 ( thus both are separately disclosed in the invoice, hence whether TDS is deductible on the whole invoice value or only on the labour portion.

Note: material is supplied by the contractor

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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25 May 2012 Sub-section 3 of Section 194C provides that where the value of material is separately mentioned on the invoice, TDS will be deducted on the amount excluding the value of material.

Accordingly, in this case TDS shall be deducted on Rs. 68,110.

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CA Himanshu Binani

CA Himanshu Binani (Querist)
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25 May 2012 So if I pay 30% adv for the contract value thus if TDS deductible on labour portion only which omes to 68110*30% = 20433 on a single contract , thus 194C doesnot attract as limit for a single contract is 30000/- .Hence TDS should not be deducted at the time of payment of advance.

Am I right or since the full payment on a single contaracr (including material) has crossed 30000/- hence TDS is deductible at the time of giving advance

CA Himanshu Binani

CA Himanshu Binani (Querist)
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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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25 May 2012 At the time of giving the advance, you know that the total amount will exceed Rs. 30,000. Therefore you should deduct TDS at the time of advance.

CA Himanshu Binani

CA Himanshu Binani (Querist)
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25 May 2012 thus tds should be deducted on 20433 @ 2% for company at the time of giving advance against this contract even though the total amt of adv payment would be 150136/-

CA Himanshu Binani

CA Himanshu Binani (Querist)
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25 May 2012 thus tds should be deducted on 20433 @ 2% for company at the time of giving advance against this contract even though the total amt of adv payment would be 150136/-

CA Himanshu Binani

CA Himanshu Binani (Querist)
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25 May 2012 thus tds should be deducted on 20433 @ 2% for company at the time of giving advance against this contract even though the total amt of adv payment would be 150136/-

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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25 May 2012 Yes TDS will be deducted on Rs. 20,433 even though the payment is for a sum of Rs. 1,50,136. TDS will not be deducted on the advance in respect of material.

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