TDS 194C - Applicability

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602 Points Posted on 13 May 2020
I would like to know if TDS is applicable on AMC contract ,if the amount is Rs 3000 per month, paid every month as AMC charges. The overall payment to the contractor over the financial year is less than Rs 100000/- . Kindly share your opinion. Thanks
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On 13 May 2020 at 20:29 Report
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Quick Summary
This discussion clarifies the applicability of TDS (Tax Deducted at Source) on Annual Maintenance Contracts (AMC). While TDS is generally applicable, it's only required if payments exceed specific thresholds. For AMC charges paid monthly, if the total annual payment to a contractor remains below Rs 100,000, or if individual payments don't breach Rs 30,000, TDS may not be necessary under Section 194C. The nature of the contract is also a factor; a simple AMC for office machinery might differ from a 'built-operate-transfer' agreement.

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110 Points Posted on 13 May 2020
TDS is applicable on AMC contract. However, in your case, total AMC charges would not breach the threshold liMit of Rs 30000 on individual basis or Rs 100000 on aggregate basis. Therefore, no TDS is req to be deducted.

Regards,
Nihit
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On 13 May 2020 at 21:15
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602 Points Posted on 13 May 2020
Thank you for your Quick response.
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On 13 May 2020 at 21:16
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602 Points Posted on 13 May 2020
Many thanks for your response. Trust when you say individual basis it means a single payment of rs 30000/-
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On 13 May 2020 at 21:41
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110 Points Posted on 14 May 2020
Your understanding is correct.
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On 14 May 2020 at 12:37
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602 Points Posted on 14 May 2020
Many thanks sir.
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On 14 May 2020 at 12:38
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28271 Points Posted on 15 May 2020
@ karun


Another point needs to be clarified..


nature of the contract...
If it is mere AMC OF any office machine it is not applicable..


But if it is a built operate transfer basis contract then it is possible...


SEC 194 C IS ATTRACTED
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On 15 May 2020 at 09:53
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602 Points Posted on 15 May 2020
It's a coffee machine which is maintained by the vendor of the company with monthly chares of Rs 3000 ,cost of consumable will be extra. thanks
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On 15 May 2020 at 10:07
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Profession
28271 Points Posted on 15 May 2020
If the vendor provides a gst bill.
pay accordingly...
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On 15 May 2020 at 10:14
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602 Points Posted on 15 May 2020
Sir, the machine is provided by the vendor, AMC is paid every month and on termination of contract the machine is retrieved by the vendor. We have not paid for the vending machine.
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On 15 May 2020 at 12:51

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