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194Q Invoice includes service

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CA Peddireddy Balaji

35 Points Posted on 27 December 2022

In Invoice if both supply of material and services are there, what is the situation in below 2 cases

1. Material value and Service value mentioned separately
2. Material value and Service value not mentioned separately. only one value is there

What is the TDS liability in above 2 cases and under which section?

Replies (2)

Quick Summary

This discussion clarifies TDS implications when an invoice includes both material supply and services. It explains that if values are separate, TDS is calculated individually. If values are combined, TDS is applied to the total invoice amount. While Section 194C typically applies, the user raises a crucial point about whether Section 194Q should be considered for material components.

Mitali

Finance Professional

37162 Points Posted on 27 December 2022

1. If an invoice includes both the supply of materials and services, and the value of the materials and services is mentioned separately, then TDS will be calculated separately on the value of the materials and on the value of the services.

2. If the invoice includes a supply of materials and services, but the value of the materials and services is not mentioned separately, then TDS will be calculated on the total value of the invoice.

In both cases, the TDS liability will be calculated under Section 194C of the Income Tax Act of India, which relates to TDS on payments made to contractors and professionals.