Queries about TDS calculation in 194C

1. ❌ Not just ₹30K → ✔️ TDS (if applicable) on ₹1,10,000
2. ❌ Not 194C → ✔️ Likely:
   • 2% Equalisation Levy, OR
   • Section 195 (case-specific)

Thanks for the reply. The payment is being made to Facebook India having office in India. 

What is the need of equalisation levy or section 195? I think these are applicable for foreign companies.

Please confirm if 194C is correct for TDS deduction.

TDS applicable on Advertisement @ 2% under section 194C on assessable amount.

Handling TDS for advertising payments to a platform like Facebook can be a bit tricky once you cross that threshold. Based on the provisions of Section 194C, here is how you should handle the calculation:

### 1. Calculation Base: 30k or 1.1L?

Once the aggregate total of payments to a single party exceeds **₹1,00,000** in a financial year, TDS is applicable on the **entire amount** paid during the year, not just the incremental amount.

Since your total has reached ₹1.1L in Q4:

 * You must deduct TDS on the **full ₹1,10,000**.

 * In Q4, when you process the ₹30,000 payment, you will calculate the tax for the whole ₹1.1L and deduct it from this final payout.

### 2. TDS Rate under Section 194C

The rate depends on the legal status of the "Contractor" (the payee):

 * **Individual / HUF:** 1%

 * **Others (Companies/Firms):** 2%

Since the payments are made to **Facebook (a Company)**, the applicable rate is **2%**.

**Total TDS Deduction:**

₹1,10,000 \times 2\% = ₹2,200

### **⚠️ Important Note: Section 194C vs. 194O vs. Equalization Levy**

While many professionals use **194C** (Contract/Work) for ad spends, there are two other things you should double-check:

 * **Equalization Levy (EL):** If Facebook is being paid as a non-resident entity and doesn't have a Permanent Establishment in India, you might actually be looking at an **Equalization Levy of 6%** rather than TDS under 194C.

 * **Section 194O:** If the payment is routed through an e-commerce participant, a 1% TDS might apply under 194O.

However, if you are certain it falls under 194C, the **2% on the gross 1.1L** is the correct way to catch up on the deduction. Be sure to deposit the amount by the 7th of the following month (or by April 30th if it's a March provision) to avoid i

nterest penalties!