TDS Contract / 194C

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B.Com
77 Points Posted on 30 October 2023
Sir/Madam,
I have to made a payment of Rs 46000/- for a 3 different invoice of same vendor.All invoices are below 30,000. Whether I have to deduct TDS u/s 194C
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On 30 October 2023 at 16:08 Report
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Quick Summary
This discussion clarifies when to deduct Tax Deducted at Source (TDS) under Section 194C for payments made to contractors. Even if individual invoices are below £30,000, TDS must be deducted if the total payment for a single contract exceeds this amount or if the cumulative payment to the vendor in a financial year surpasses £100,000. It's advised to deduct TDS at the applicable rate (1% or 2%) to avoid issues, especially when payments approach the annual limit.

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"Do the Right Thing...!!!"
128157 Points Posted on 30 October 2023
What you received through the invoice from vendor...?? Service or Goods...?

If service and its should be classified 194C then Yes TDS will be deduct the payment...
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On 30 October 2023 at 17:41
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JOB
45 Points Posted on 30 October 2023

What is the limit to deduct TDS u/s 194C?

The following is the limit applicable under section 194C to deduct TDS:

  1. The amount paid or credit is a single contract that exceeds Rs 30,000
  2. The amount paid or credit during the financial year altogether exceeds Rs 1,00,000.

 In case if it is towards provision of service and as you said  each invoice value didn't exceed Rs.30,000/-  but you are making the payment for all the 3 invoices as a single payment  i.e., Rs.46,000/- then you must deduct  TDS  on the  base value of each invoice in applicable rate. 

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On 30 October 2023 at 18:46
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6 Points Posted on 30 October 2023
Si far paid Rs.46000 for three different Invoices there is not exceeding the threshold limit but with in the financial year if exceeding the payment of Rs.1 lakhs to this vendor then you can deduct TDS on payment
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On 30 October 2023 at 22:54
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Profession
28271 Points Posted on 30 October 2023
Time limit to deduct tds must be essential.
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On 30 October 2023 at 22:58
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CFO- at NHTF
58280 Points Posted on 31 October 2023
By default you can start deducting tds 1% or 2% due avoid practical issues.

Once it cross 1Lac , you have to deduct entire tax in one invoice which can create practical issues.
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On 31 October 2023 at 06:16
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"Do the Right Thing...!!!"
128157 Points Posted on 31 October 2023
@ Bala Chandran,

The payment is exceeds above 30k.
Check out the provisions...
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On 31 October 2023 at 06:31
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Profession
28271 Points Posted on 31 October 2023
Threshold limit is always not the criteria.
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On 31 October 2023 at 07:20
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CFO- at NHTF
58280 Points Posted on 31 October 2023
30,000/- and 100,000/- limits are mandatory.

But one can voluntarily follow and deduct tax without considering the limits
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On 31 October 2023 at 07:23

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