Tds deductibility


03 February 2012  

The estimated payment to a Contractor for the year is not going to exceed Rs. 75000/-. Hence no TDS is deducted in the first 2 quarters where the payment has actually not exceeded the threshold limit. But in the 3rd quarter the total payment to the contractor exceeds Rs. 75000/-. How would the TDS liability be determined?

E.g. The following bills have been raised by the contractor:

            Apr    10000

            May  10000

            Jun   10000

            July   10000

            Aug   10000

            Sep   10000

            Oct     10000

            Nov    25000

  1. Whether the TDS has to be deducted on bill to bill basis and interest on the same needs to be calculated from the due date for each month?                             OR
  2. Whether the TDS on the entire amount can be deducted in Nov without any interest payment if the same is paid by 7th of Dec?