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Cash Payment to Contractor

Tax queries 456 views 2 replies

Hello,

I am working with a Construction Contractor, in during 2 years they paid advance to their labour around 5 lakhs, like 10k , 5k 7k, 8k per labour, but maximum of them had left the company without paying their advance but last year the owner (my company) received the amount by cash paid the same to  our company contractor by cash with 5k 7k daily and TDS deducted accordingly,

My question is will there be any problem for such transaction,

Replies (2)

This is alright I think because whatever advance was paid has been accounted as received back.

Why would TDS be applicable in this case assuming that the income of such labourers to be within the basic exemption limit)?

No problem


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