194c : payment to contractor for making office furniture (with material)
Whether Payment to Contractor for making Office Furniture (totally with material) & if that Furniture is treated as Fixed Asset in the books, than please tell us :-
1. TDS is to be Deducted from those payments to that Contractor ?
2. If TDS not Deducted (just because : we have Capitalised that expenditure) : than Depreciation is Allowable on it or not ? Also tell us whether this is safer procedure as per IT Act ?
Replies (1)
As per sub-clause (e) of clause (iv) of the Explanation to Section 194C Works include
"manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer."
Hence TDS is applicable (s.b.t monetary limit)
Tax shall be deducted at source at the value as appearing -
(i) on the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or
(ii) on the whole of the invoice value, if the value of material is not mentioned separately in the invoice.
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