14 June 2007
according to section 194c normally individual & huf are not required to deduct tds but there is a situation that an individual or huf whose total sales turnover or gross receipts from business exceeds the monetary limit specified under section 44 ab during the financial year immediately preceeding the finanacial year in which income is to be credited , shall be liable to deduct tax.
mine query is that if in the previous year turnover exceed 40lacs but if in the current year in which tds is be deducted in that year turnover does not expected to exceeds 40 lacs . then is it a requirement to deduct tax.
16 June 2007
As such there is no point to consider the turnover for 194C.But, since the assessee is an individual he gets into the ambit of tds but not solely for 194C.So, he is reqd. to deduct tax at source if the contract payments cross the limit provided in the section.
18 June 2007
As per Section 194 C of the IT Act,1961, the liability to deduct tax at source arises if the turnover from business exceeds Rs. 40 Lacs in the preceding financial year. Since the figures for the preceding financial year determine an individual's liability to deduct tax at source, so if the figures in the preceding financial year do not exceed Rs. 40 Lacs, there is no liability even if gross sales in the current year is Rs. 1 Crore(for example).