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Whether to deduct tax u/s 194-c

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santosh kumar nayak (Querist)

22 March 2013 my company would like to pay m/s xyz ltd for conducting skill development training programme under corporate social responsibility scheme.agreement has been made between my company & m/s xyz ltd.Accordingly this programme involves imparting traing to villagers close vicinity to my company.bill raised by m/s xyz ltd includes
1. course fees Rs 348000
2. stipend to trainees Rs 200000
3. tool kits Rs 200000
total Rs 748000
S.tax@12.36% Rs 43013
Grand total Rs 791013

M/s xyz requested us not to deduct tax on stipend & tool kits since it will passed to benificiaries.please advice me whether to deduct tax u/s 194-c and also at what rate

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

22 March 2013 Need to deduct TDS on total bill value Rs.791013 only under sec.194C. there is such exemption given if the payment directly passed beneficiary and no tds apply. how ever the party is treating tool kit & stipend also in his billing value only. so tds apply u/s.194C. rate will be 2% if the payee is corporate, non corporate 1%

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