Tds u/s 194c
This query is : Resolved
26 March 2016
TDS is to be deducted on
payment to chowk labour. or payment on daily basis to chowk labour.
26 March 2016
Not required incase not crossing the threshold limits
27 March 2016
company not know the pan and name of chowk labour. company pay daily wages to the labours.
27 March 2016
company does not know the pan of labours.
27 March 2016
how to know the threshold limit?
27 March 2016
Threshold limit u/s.194C is Rs.75000 aggregate payment for the year or Rs.30000 single payment.
28 March 2016
194C applicable on payment to contractors not on daily wages payment. company hire labours on daily wages.
02 August 2025
You're absolutely on the right track, and let's clarify it completely to settle the doubt.
---
## ✅ **Is TDS under Section 194C applicable on daily wage payments to chowk labourers?**
### ➤ **No**, TDS under Section 194C is **not applicable** in your case **if**:
1. The **labourers are not contractors**, but **individual daily wage workers** hired directly by the company (i.e., **no contract** is involved).
2. They are **paid directly by the company** for their **own labor**, not through any labour contractor or agency.
---
## 📌 Section 194C – Scope
* **Section 194C** applies to **payments to contractors or sub-contractors** for carrying out any **work** (including labor contracts).
* **NOT applicable** when you hire **individuals directly** and **pay wages/salaries**.
### ➤ So if:
* You're hiring chowk labour **on daily wage basis**,
* And you're **not paying through a contractor**,
* And there's **no formal contract**,
👉 **Section 194C is not applicable.**
---
## 💡 When would 194C apply?
* If you **engage a labour contractor** or agency, and **make lump-sum payments** to them,
* Then 194C **does apply**, and you'd deduct TDS **if the payment exceeds ₹30,000 (single payment)** or **₹75,000 aggregate in the year**.
---
## 📌 PAN Not Available – Does it matter?
If 194C **does not apply**, then the **issue of PAN or TDS doesn’t arise**.
But if 194C **did apply**, and PAN is **not available**, then:
* TDS must be deducted at **20% (as per Section 206AA)**.
---
## ✅ Summary:
| Scenario | TDS u/s 194C? |
| ---------------------------------------------- | ----------------------------- |
| Labour hired directly by company (daily wages) | ❌ No |
| Labour hired through contractor | ✅ Yes (if threshold exceeded) |
| PAN not available and TDS applies | ✅ Deduct at 20% |
---
Let me know if you're dealing with both types (direct & contract labour), and I can help you separate the compliance.
---
## ✅ **Is TDS under Section 194C applicable on daily wage payments to chowk labourers?**
### ➤ **No**, TDS under Section 194C is **not applicable** in your case **if**:
1. The **labourers are not contractors**, but **individual daily wage workers** hired directly by the company (i.e., **no contract** is involved).
2. They are **paid directly by the company** for their **own labor**, not through any labour contractor or agency.
---
## 📌 Section 194C – Scope
* **Section 194C** applies to **payments to contractors or sub-contractors** for carrying out any **work** (including labor contracts).
* **NOT applicable** when you hire **individuals directly** and **pay wages/salaries**.
### ➤ So if:
* You're hiring chowk labour **on daily wage basis**,
* And you're **not paying through a contractor**,
* And there's **no formal contract**,
👉 **Section 194C is not applicable.**
---
## 💡 When would 194C apply?
* If you **engage a labour contractor** or agency, and **make lump-sum payments** to them,
* Then 194C **does apply**, and you'd deduct TDS **if the payment exceeds ₹30,000 (single payment)** or **₹75,000 aggregate in the year**.
---
## 📌 PAN Not Available – Does it matter?
If 194C **does not apply**, then the **issue of PAN or TDS doesn’t arise**.
But if 194C **did apply**, and PAN is **not available**, then:
* TDS must be deducted at **20% (as per Section 206AA)**.
---
## ✅ Summary:
| Scenario | TDS u/s 194C? |
| ---------------------------------------------- | ----------------------------- |
| Labour hired directly by company (daily wages) | ❌ No |
| Labour hired through contractor | ✅ Yes (if threshold exceeded) |
| PAN not available and TDS applies | ✅ Deduct at 20% |
---
Let me know if you're dealing with both types (direct & contract labour), and I can help you separate the compliance.
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