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Is tds deductible?

Faraz (Student) (236 Points)

18 February 2014

A Company is engaged in textile business. It has hired workers who stitch fabric. The company makes cash payment every 15 days. My query is, whether TDS under 194C (job work) is attracted since the co is supplying material and they are stitching as per the specification of the company. The limit of 75000 gets crossed in a financial year.

Thanks

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7 Replies

Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 18 February 2014

I think it would be more specific if you provide the basis for payment to the labour for every 15days and furthur as you told you hire labour,are you hiring labour from one organisation or individually? If from one organisation,Yes,Company is liable to deduct T.D.S U/s.194C as the above work come under the definition of "work" for the purpose of T.D.S and aggregate payments made to your contractor organisation exceeds 75000 in aggregate.Nevertheless,no need to dedect T.D.S unless each individual payment exceeds 75000 in a financial year.

Faraz (Student) (236 Points)
Replied 18 February 2014

Workers are hired not from any organisation. They are individual. Payment to each individual crosses 75000 limit in a financial year.

CA SUKSHAM ARORA (CA) (569 Points)
Replied 18 February 2014

ACCORDING TO ME TDS IS DEDUCTIBLE ON THE LABOURERS UNDER CONTACTAT THE RATE OF 1% (SC-NIL, EC & SHEC-NIL)[individuals/HUF]

NAVEEN KUMAR (Student CA IPC / IPCC) (23 Points)
Replied 18 February 2014

DEAR FARAZ,

ACCORDING TO TDS LIABILITY ON CONTRACTOR 194-C LIMIT IS 75000 OR ABOVBE OR SINGLE TRANSACTION OF 30000 OR ABOVE FOR ANY COMPANY,FIRM,INDIVIDUAL OR HUF AS THE CASE MAY BE.

AS IN YOUR CASE YOUR CO. IS ENGAGED IN HIERING INDIVIDUALS FOR STICHING FABRIC. WHO JOB WORK CROSS THE LIMIT OF 75000 IN A YEAR. SO YOUR COMPANY IS LAIBLE TO DEDUCT TDS UNDER SECTION 194-C @ 1% AND INTEREST IN LATE PAYMENT OF @ 1.5% PER MONTH (IF APPLICABLE)

Durga Prasad (Trainee) (392 Points)
Replied 19 February 2014

Agreed with above discussion,

Faraz, Co. has to deduct tds @ 1% if the workers have pan card and @ 20% if they don't have pan card.

Ramanuj (Accountant.) (834 Points)
Replied 19 February 2014

Dear Feroz

If you are not hire any organization paid excess 75000/- to indivitual then TDS is applicable. becouse you are not paid as salary. its has contract that is tds is appliable.

thanks

Ramanuj

Naresh Dharia F.C.A. (PROPRIETOR) (426 Points)
Replied 19 February 2014

At first ...in the present case as the Co. have hired workers, any contract signed between the parties?? If yes...chk for the payment terms... If YES....then Tds will apply u/s 194 C