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TDS Calculations

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Tushar Sharma

MIS cum Accounts Manager and Senior Inte

38 Points Posted on 08 September 2021

Dear all
I need an advice relating to the tds
Suppose I had given contract of 150000 to xyz company in Dec 2020 and the part contract has been completed by company and I had paid the part amount of 75000 on 1st Feb 2021 but fail to deduct tds at 1.5% on the same and now on 1st sep 2021 the remaining work has been completed and bill raised of 150000 and balance 75000 is payable, shall I deduct tds at 2% on whole 150000, is it legitimate and if there any liability of penalties late fees and interest will arise on the same...plz guide

Replies (3)

Quick Summary

This discussion addresses a common query regarding Tax Deducted at Source (TDS) on contract payments. The user failed to deduct TDS on an initial payment of ₹75,000 for a ₹1,50,000 contract and is now seeking guidance on deducting TDS on the remaining ₹75,000 payment. The advice provided clarifies that TDS should have been deducted at the time of credit or payment, whichever was earlier, and that penalties, interest, and late fees may apply due to the failure to deduct tax on the initial amount.

shrawan choudhary

132 Points Posted on 08 September 2021

In my opinion,sec 194c will be attracted and you should have been deducted tax at the credit or payment whichever is earlier.in your case, penalty will be charged since failure to deduct tax .