TDS u/s 194C on Advance paid
This query is : Resolved
Pinkey Chowbey
(Querist)
24 December 2009
Our client is into road construction. The contractor is being paid material advance every month which is subsequently recovered(entire advance) from the contactors dues for the next month. This practice is being followed every month & each time fresh advance is being paid and the previous advance is recovered from the contractor's dues for the work done.
That is, the advance is merely being paid to give financial assistance to the contractor. It is nither the client's cost as they are recovering it, nor the contractor's income.
But sec 194C says that Tds should be deducted on any payments made. Hence under this situation is TDS at all applicable on such payments. If no then how should the client defend himself incase he is caught under the net "any sum paid". Please clarify with the help of case laws,if any.
Regards,
Pinky
That is, the advance is merely being paid to give financial assistance to the contractor. It is nither the client's cost as they are recovering it, nor the contractor's income.
But sec 194C says that Tds should be deducted on any payments made. Hence under this situation is TDS at all applicable on such payments. If no then how should the client defend himself incase he is caught under the net "any sum paid". Please clarify with the help of case laws,if any.
Regards,
Pinky
ANIL JANGID
(Expert)
24 December 2009
TDS SHOULD BE DEDUCTED WHILE ON PAYMENT EVEN ADVANCE.
Murtaza I Bhagat
(Expert)
24 December 2009
when you cross the limit of IT Act u/s 194C then even it is as advance. there has been deduction compulsory.
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