tds u/s-194 C

Save Share

This query is : Resolved

ATUL BAJAJ (Querist)
Follow

16 October 2010 A Building Contractor enter into a contract for the erection of building for Rs. 5 lakh. as per the contract all the material provided by contractor himself. for the same Tds Should be deducted or not ??? reply for the same with decided cases if u have ????????

Definition of Work u/s 194C clarified- as par budget 2009
TDS on outsourcing contract
1 Excluded where product made under specification of customer – raw material
purchased from other person
 However, Included Contract where raw material is supplied by customer
 Value for TDS- In case invoice separately reflects raw material value – TDS on
amount excl Raw Material Value
otherwise TDS on Full Invoice Amount.
my doubt is upon 1 point above . as per me all material provided by contractor himself.. sir can u dispel this doubt

CS ,CMA Shambhu Kr. jha

CS ,CMA Shambhu Kr. jha (Expert)
Follow

16 October 2010
see tax is deducted on the income
as you disclosed that your contractor is providing all the material from there end but that is not his income , yaa of course you are reimbursing that but in this case tds will be deducted only on the amount you are paying for there services means total amount paid by you minus cost of material supplied by them
hope you doubt has been cleared

ATUL BAJAJ

ATUL BAJAJ (Querist)
Follow

16 October 2010 here contractor himself mean builder contractor... please clarify again

CS ,CMA Shambhu Kr. jha

CS ,CMA Shambhu Kr. jha (Expert)
Follow

16 October 2010 can you please tell me the nature of contract between builder and you .
because in this case nature of contract is very much required

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

16 October 2010 Building construction is not, as per my understanding,a manufacture or supply of a product with in the meaning of explantion (iv) (e) to section 194C of the Income tax Act,1961. In view of that, from where the material is purchased need not be looked into. But the definition of work is an inclusive one, therefore,contract done by the contracor using his own material (not purchased from open market or purchased from awarder) is a "work"on which tax has to be deducted under section 194C of the said act.

ATUL BAJAJ

ATUL BAJAJ (Querist)
Follow

20 October 2010 Thanks

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now