Query tds on subcontracting to the partners

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bhavik mehta

C.A.

526 Points Joined May 2008

Hello all,

In one of thee case partnership firm has subcontract to the partner in his personal capacity. so my Q are:

1. is it allowed or it is considered in part of remuneration paid /allowed t the partner?

2. if allowed whether p. firm required to deduct TDS on it?

3. and all this transactions whether suggested to be book in capital a/c or with separate a/c in the books of a/c?

Thanks to all.

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Replies (2)

Ritzz

CA Final - Article

365 Points Joined January 2010

Interest paid on partner's a/c and salary/remuneration by whatever name called are liable to TDS at all.

However, since u mentioned about sub-contracting...i feel tds will have to be deducted at 1% (individual).

Wait for more opinions/answers on your query.

Regards

Prashant Kini

Article Assistant

154 Points Joined December 2008

where a firm sub-contracts the work to one of its partners the same is not considered as payment of remuneration. However care should be taken of sec 40A(2) of IT Act. Tds is to be deducted at the rate of 1%. also the above transactions are advisable to be recorded in separate debtor ledger