Section 194c payment to contractors

I am working at a organisation which receives bills from security contractors, repairs contractors, civil contractors, etc.

Bill is on the name of firm. But PAN is furnished in name of individual.

1. Shall we take them as "Individual contractor" for the purpose of deducting 1% TDS on section 194C?

2. shall we accept their declaration as proprietory firm which may be deducted 1% TDS alone in their payments?

3. Shall we ask for PAN only to be in the name of organisation which serves bills.

We would like to know what are the defaults which may arise

when the PAN & deductee names differs and lower deduction of TDS if any happened in this regard.

Awaited yours guidence,

V.Santhanakrishnan

Originally posted by : V Santhana krishnan
	I am working at a organisation which receives bills from security contractors, repairs contractors, civil contractors, etc. Bill is on the name of firm. But PAN is furnished in name of individual. 1. Shall we take them as "Individual contractor" for the purpose of deducting 1% TDS on section 194C? Or 2. shall we accept their declaration as proprietory firm which may be deducted 1% TDS alone in their payments? Or 3. Shall we ask for PAN only to be in the name of organisation which serves bills. We would like to know what are the defaults which may arise when the PAN & deductee names differs and lower deduction of TDS if any happened in this regard. Awaited yours guidence, V.Santhanakrishnan

You should ask the PAN of the person who is providing you the services. For instance if the person is an Indiviual / Propreitor, TDS needs to be deducted @ 1%. If the person is not an individual / propreitor & you deduct TDS @ 1%, it will amount to lower deduction of tax at source which will result in consequences.