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Deduction of tds in case of pan mentioned on bill

Rajat (India) (76 Points)

27 December 2011

We are getting job work done in our business from some outside vendor. We send them material they cut in into small pieces and give back to us. They chharge per piece job work charges . When we are deducting TDS from their payment they have raised a question that "since they have mentioned their PAN No.on Job work bill the TDS can not be deducted".

Can we make payment without deducting TDS??

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10 Replies

CA Kumar Mukesh (CA CMA FINAL and Advance Excel Trainer) (6871 Points)
Replied 27 December 2011

you cant not release payment/ book a bill without deducting tds since jobworker doent mentioned his Pan on bill you can simply ask for pan copy otherwise you have to deduct TDS @ 20%

please also take whether transaction exceeds Rs. 75000/- in said financial year

valji (Accounts manager-MBA) (2150 Points)
Replied 27 December 2011

agreee with above , check the payment whether exceed rs 75000 in a year , you have to deduct the TDS first then realeased the payment

CA.Madhu (Charted Accountant) (204 Points)
Replied 27 December 2011

Deduction has to be if, any sum credited/paid is exceed Rs.30K and aggregate in a year exceed 75K, if PAN not provided @ 20% to be deducted if covered in above criteria

1 Like

Neeraj P Chourasia (Accountant) (60 Points)
Replied 27 December 2011

Originally posted by : ✇ Mukesh Kumar
	you cant not release payment/ book a bill without deducting tds since jobworker doent mentioned his Pan on bill you can simply ask for pan copy otherwise you have to deduct TDS @ 20% please also take whether transaction exceeds Rs. 75000/- in said financial year

Jobwork is covered as contract u/s. 194 C of The Income Tax Act and hence TDS @ 1% (if PAN is provided) or TDS @ 20% (if PAN is not provided) is to be deducted from the above bill before making the payment if a single bill exceeds Rs.30,000/- of aggregate of bills during a financial year exceeds Rs.75,000/-.

CA Mudit Agarwal PGDFM,MCP,IFR (Dy. Manager (Taxation)) (289 Points)
Replied 27 December 2011

agreed with Neeraj.......

CA Kiran Sutrave (CA) (428 Points)
Replied 27 December 2011

Agree with CA Madhu and Neeraj. TDS is to be deducted on job work done under section 194C @ 1% if payment is made to Individual or HUF or @ 2% if payment is made to any other person provided one time payment exceeds30,000/- or75,000/- in a year.

Ashvin Bhanderi (ACCOUNTANT) (59 Points)
Replied 28 December 2011

u hav deduct tds in case payment exceeds rs. 75000 aggregate in a year @ specified percentage even if pan card copy is given.

sadashiv Rupchand Gaikwad (Proprietor) (521 Points)
Replied 01 January 2012

Perhaps contrcee may not under tax audit. You may check that your all payments are received in proper or not. If there may be shortage, ask him, take F16A of difference.shortge amount. Show your PAN card your deductor.

ankur garg (Independent Practitioner) (34 Points)
Replied 02 January 2012

I agree with rupchand gaikwad that first basic test to be satisfied is whether the deduction provisions are attracted in your case viz. first checking Your capacity in terms of definition of "assessee" under income tax act & then criteria given by mr. neeraj above needs to be applied.

sadashiv Rupchand Gaikwad (Proprietor) (521 Points)
Replied 09 January 2012

The defination assessee means the not a person who has to pay income tax, Assessee means not whose taxable income is more than taxable limit.DDO, Loss retrun filer,any person may comes under the conceprt of Assessee. You may read Scrutiny Orders for Deductor passed by TDS section ITD. There is not word "Deductor" but there is word "Assessee"