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tds-contractor

student (WORKING) (757 Points)

02 July 2008

TDS ON CONTRACTOR--- IMPLICATIONS IN TWO BELOW MWNTIONED CASES case A
01-04-07	5000
01-05-07	2500
20-06-07	2000
21-06-07	20000
23-09-07	5000
26-09-07	9000

full year less than 50000
now whether tds will be deducted on
all or tds will be deducted from 21/6/07 to 26/9/07 b/c rs 20000 limit crossed once

case b
01-04-07	5000
01-05-07	20000
20-06-07	5000
21-06-07	10000
23-09-07	5000
31-03-08	10000

full year more than 50000
now whether tds will be deducted on
all & since "Rs. 50000 threshold limit "exceeds on 31/3/08
we have to pay int on tds deducted for above amts

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6 Replies

kaushik (student) (0 Points)
Replied 03 July 2008

IN CASE A YOUR TDS WILL BE DEDUCTED ONLY ON RS. 20000 AND IN CASE B IT WILL BE ON ALL THE PAYMENTS SINCE IT EXCEEDS RS. 50000.

CA. Atindra A. Prabhu Bhatikar (practising CA) (68 Points)
Replied 03 July 2008

With respect to CASE A no TDS will be required to be deducted as the wordings of sec 194 C are "sum exceeding Rs.20,000/-".

In CASE B, TDS will be required to be deducted on all the earlier payments once the threshold limit is exceeded. No interest will be levied as the deductor had no idea that the thresold limit would exceed.

amrut (c.a.student) (23 Points)
Replied 03 July 2008

in case A,no TDS is required to be deducted as the payment made is not exceeding the limit of Rs20000 for single transaction or Rs50000 for aggregate during 1 financial year.

However, in case B, TDS is required to be deducted on all payments till the date ,ie on 31/3/2008 ,of exceeding the threshold limit of Rs 50000 during the year,No intt is to be charged on such earlier payments.

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 03 July 2008

AMOUNT OF PAYMENT IS NOT RELEVANT , AMOUNT OF CONTRACT IS RELEVANT ..........IF THE CONTRACT IS FOR MORE THAN RS 20,000 BUT PAYMENTS ARE SAY @ 5000/- ........TDS WILL BE REQUIRED.

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 03 July 2008

Think logically....How do you know in april that your contract amount would exceeds taxfree limit in relevant FY. So TDS deductable on whole amount but only when amount crossess taxfree limit.

nikky (dsds) (29 Points)
Replied 25 July 2008

We have imported of Materials from USA. our contractor is advice to payment of Container corporation of India. we had agree to deduct the TDS 2.06% on value but contractor said that it is not possible. what can i do ?