19 September 2016
We purchased fixed asset for 500,000/- and paid installation charge for 15,000/- (separately shown in bill)whether TDS is to be deducted on 15000/- or not? whether is it a contract?
19 September 2016
As per me, its not a contract. If u have done AMC for that asset, then TDS should b deducted on that bill value(AMC part only which is done monthly/quarterly/annually as applicable). U r required to capitalized that amount(add the amount of 15K along with the cost of Asset).
19 September 2016
Installation charges are subject to TDS, if shown separately in the BILL. (Subject to, however, the overall limit as set out in sec 194C)
19 September 2016
Dear Amol Sir, please dont mind, but, Can u please explain to me some little things:
According to which provision ITO will disallow my capitalization Exps? As per me there is no provision in Income Tax Act regarding Deduction of TDS and if not deducted than dis allowances of Such Capital Exps. Can u please show me if there is any prov or judgement regarding that?
19 September 2016
Income tax may differ from Accountancy at certain point of time. A revenue expenditure may be capitalised as per the accounting treatment...e.g. installation charges. In your case since the same are shown separately in the BILL, TDS should be done on the same.(subject to however those conditions of 30,000 and/or 100,000)
19 September 2016
But section 194C used the word ''SUM PAID TO CONTRACTORS'' then I am in a doubt whether TDS is to be deducted on the whole amount of 5,15,000/- or not, because ACT does not separate the payment in to capital exp and to revenue exp
19 September 2016
you have said that the amount of installation charges are shown separately. Hence deduct TDS on 15000 only. for a similar action, it is given in section 194 C....that when the value of invoice excluding the value of material if it is shown separately
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