Query related to TDS

Dear All,

 

Please give expert Advice on my following Q?

 

We are a company & got a railway contract of cleaning. We have subcontracted the same , in which machines will be ours & labour will be of subcontractee.

Now Subcontractee gives a bill in which there is clear bifurcation of "ESI , PF " (of subcontractee employees) & "Consultancy"

His bill is like that  

(exapmle)

 ESI                          100 

PF                            50

Consulatncy           160

Total                              Rs310

 

Question is whether TDS is to be deducted on310 (total amount) or160 (consultancy amount). Subcontractee is of the opinion that ESI & PF are reimbursement of his expenses only .He also gives supporting in respect of above ESI & PF.

Also i require Rule/ section/case law in support of your answer

 

 

Replies (1)

Employer's contribution toward PF = 12% on Basic + DA, and 1.1% admin charges on Basic + DA

Employer's contribution toward ESIC = 4.75 % on wages

 

The subcontractee is recovering the above from you.

So I think TDS will have to be deducted only from the consultancy fees, which is Rs. 160/-.

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