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Calculation of tds

NIKHIL (Manager) (26 Points)

18 February 2012

Sir

I have started a small firm and organising an robotics workshop in university , the workshop cost is 6,000/- and in that the kit cost is 5,200, and totally 30 teams registered for the workshop , the professional charges are 800/-

may i know on which they need to reduce the TDS and how much percent

Thanks & Regards

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9 Replies

RAKESH (Almost CA) (2199 Points)
Replied 18 February 2012

I think it comes under profesional category U/s. 194J .

Rate : 10%

TDS is to be deducted on all the sum i.e 6k+5.2k+0.8k

Wait for others replies.

NIKHIL (Manager) (26 Points)
Replied 18 February 2012

but the kit i am purchasing from another seller by paying tax to him so still the TDs wil be deducted on 5.2 K

SOUMYADIP (CA) (64 Points)
Replied 18 February 2012

As per the information provided to you following points should be noted

1) Total payments to be made per team-12000

2) Total Income of the assesee-12,000*30 =3,60,000

So if u note that the payment made by each person during the year( assumed that no income will come from such party inremaining part of the financilal year under consideration) is less than 30,000 per party. no tds is to be deducted.

But if we consider that the person will receive payment from the same party in future then tds will be deducted u/s 194J. As per circular no 715 tds will be deducted on whole amount as section 194J states about any payment. So tds will deducted on whole amount inclusive of all charges

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NIKHIL (Manager) (26 Points)
Replied 18 February 2012

sir

the cost for each team is 6,000 and it includes 5200 kit cost and 800 professional charges . i have purchased kits from manufacturer which has a invoice paid for 5,200 inclusive of tax .

so total profit in workshop is 800*30 = 24,000

which falls less than 30,000 , should i still pay TDS

Niraj Mahajan (Practising CA) (985 Points)
Replied 18 February 2012

@ Nikhil : What matters it the gross amount of the invoice. If you are charging kit fees and professional fees under one invoice, TDS needs to be made on the gross amount. So do not think your income is just 800*30=24000.

IF the party making you payment will not make payments to you henceforth in FY 2011-12 (assuming 1 month remaining) and assuming the gross invoice amount is Rs.6,000/- NO TDS NEEDS TO BE MADE SINCE THE INCOME IS BELOW RS. 30,000/- FROM EACH PARTY.

Hope this clarifies

Sachin kumar (CA Final) (63 Points)
Replied 19 February 2012

since the transaction is covered in section 194J tds is to be deducted on total invoice amount i.e on Rs. 6000/- inclusive of Kit cost @ 10%. but if per team payment will not exceed Rs 30000/- in a year no tds needs to be deducted.

Nagam saisameer (CA FINAL ) (170 Points)
Replied 19 February 2012

As per 194J NoTDS is need to be deducted as per ur Details

courageous Aries ( ) (263 Points)
Replied 19 February 2012

Nikhil bhai Profesionl services has been defined to mean services rendered by a person in course of carrying on Legal,medical,enginering or architecture profession or the profession of accountancy or technical consultancy or intereior decoration. or profession covered u/s44AA of the act.

If you are providing any of the above srvices then you are covered u/s 194j and TDS would be decuted @ 10% on The TOTAL AMOUNT OF THE BILL

As per sec 194C , the provison are attrcted only when sum is paid for carrying out any work

Also meaning of Contractor includes a person who is caryying out work, including supply of labour for carrying out some work in pursuance of contract(Contract can be written or oral)

TDS should be deucted u/s 194C @ 1%(Incase it is individual/HUF) on the total invoice. or 2% in other case

Since you are carrying out the work you would be covered u/s 194C of The Income Tax Act,1965 so the TDS would be deducted @ 1% or 2% .

Hope the information is clear to you.