02 August 2025 You're absolutely on the right track, and let's clarify it completely to settle the doubt.

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## ✅ **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.

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## 📌 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.**

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## 💡 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**.

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## 📌 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)**.

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## ✅ 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% |

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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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