Dear sir
we are construction company, we make advance payment to contractor before completion work, how do treat TDs 194C without bill , any body share your opinion.pls.
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About TDS To advance payment
Replies (6)
At least you will be taking receipt for advance payment to your contractor that is ok for time being for 194C. Hope it's cheque payment.
yes we make it receipt on that time, always cheque payment, can do we deduct TDs on receipt and how to adjust in invoice
Just make it as advance payment. After received invoice/bill from contractor adjust the same against the advance.
You are required to deduct TDS on Advance payment to contractors if total contract value is more than 1 Lac
At a time of payment to contractor, you need to deduct TDS @ 1% for individual or 2% for other than individual
At a time of payment to contractor, you need to deduct TDS @ 1% for individual or 2% for other than individual
If you are purchasing materials against the advance payment, then no TDS deduction is necessary.
Many of the entries in 26AS statement for Contractors resemble advance payment (regarding R.A Bills)rather the final bill . It is commonly seen in this Industry.
In general you have to make T.D.S since its the 'payment or credit which is earlier' at the time you make a payment and after completion of contract or otherwise arriving at final bill, adjust the same.
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