The site supervisor of a construction company raises bill for supervision charges @ Rs. 8000 per month on a monthly basis to the company. Until 30th September, 2009 the contractor has raised 6 separate bills and the company has paid Rs. 48000 to the supervisor. My question : For the F.Y. 2009-10, is the company liable to deduct TDS u/s 194C on the above amount or not.
The supervisor insists that TDS is not deductible because Rs.48000/- has been paid against 6 separate contracts and/or bills and as per Section 194C, if payment to to Contractors / Sub-contractors does not exceed Rs. 20,000/- per contract or aggregate payments in a year does not exceed Rs. 50,000/- per annum, NO TDS is deductible. So, in this case each contract is below Rs.20000/- and the aggregate payments do not exceed Rs. 50000/-.
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