LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Is TDS deductible?

Sanjay (Student) (112 Points)

02 July 2011

Hi All,

We have received two bills from one of our contractors towards purchase of Laptops amounting90,000/- and towards AMC charges of INR 24000/-. I want to know whether TDS amount is deductible on AMC Charges or not and also tell me the rate of TDS.

Thanks,

Sanjay Bhagat

Reply
Follow
Share

7 Replies

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 02 July 2011

as amc charges r lower than specified limit hence tds should not be deducted.

rectify me if i am wrong

C.A SHASHANK GOYAL (Chartered Accountant) (362 Points)
Replied 02 July 2011

Hi, under this situation section 194c will be applicable , and TDS may or may not be deducted depending on the situation :

situaition 1 : if during the previous year no other bill of same contractor has been raised then no TDS is required to be deducted as Rs. 24000 is below the ceiling limit .

situation 2 : if any other bill has been raised thereby crossing the financial yeare ceiling limit of Rs. 70000 along with this bill then TDS is required to be deducted .

Ex : if other bill of Rs . 50000 has been raised along with this bill then tds is required to be deducted on both.

1 Like

KIYOSH (TAX CONSULTANT) (332 Points)
Replied 02 July 2011

AGREED WITH SHASHANK GOYAL

Anjaly.P.A ( Article( CA Final)) (221 Points)
Replied 02 July 2011

If the payment is made before 30.06.2010, TDS should be made u/s 194C.

If after that date, the limit has been increased to 30000 per paymnt & agregate 75000/-

Sanjay (Student) (112 Points)
Replied 06 July 2011

Hi all,

Thanks for your valuable replies.

Dear I am getting confused with you answer. so can you explain me whether TDS is deductible on AMC (Total Bill amount is INR 24,000/-) with the consideration that we have also purchased laptop(Bill amount is INR 90,000)from the same vendor. Actually, I want to know whether the condition of aggregate (i.e. single payment =INR 30,000 or aggregate of small payments => 75,000/-) will apply on both the bills or not????

CA PARAS BAFNA (Practising CA ) (33423 Points)
Replied 06 July 2011

On transaction of purchase TDS provisions are not applicable. TDS U/s 194C is deductible only on AMC Charges.

Here AMC charges paid 24000/- i.e. less than 30000/-

If you pay further AMC in respect of other 2 computers also to the same vendor for a single bill of 48000/ - then AMC charges will be deducted as this will constitute a single payment exceeding30000/- , TDS will be deducted on48000/-. and not on72000 as the limit of75000/- has not yet crossed.

Do not give more THAN 3000/-AMC to this person now , otherwise on exceeding the total AMCs to 75000/- TDS is required to be deducted on 24000/- also WHICH WAS EXEMPT in the first instance earlier.

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 06 July 2011

Originally posted by : Paras Bafna
	On transaction of purchase TDS provisions are not applicable. TDS U/s 194C is deductible only on AMC Charges. * Here AMC charges paid 24000/- i.e. less than 30000/- If you pay further AMC in respect of other 2 computers also to the same vendor for a single bill of 48000/ - then AMC charges will be deducted as this will constitute a single payment exceeding30000/- , TDS will be deducted on48000/-. and not on72000 as the limit of75000/- has not yet crossed. * Do not give more THAN 3000/-AMC to this person now , otherwise on exceeding the total AMCs to 75000/- TDS is required to be deducted on 24000/- also WHICH WAS EXEMPT in the first instance earlier.