Tds deduction

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In an apartment with more than 300 flats ,the builder has enetred into an agreemment with a third party service provider to provide common maintenance & catering service to the residents.Though there is a resident association, the buiulder has bypassed it in connivance with some residents & directly entererf into the contract

The residents have been dircted by the builder to pay the maintenance and catering bills directly to the service provider(each month's bill is running to around 6 to 7 lakhs)

Till now no  TDS is being deducted (the contract is in force for nearly 4 years) & there is no way no know whether the contractor is reflecting the income correctly to IT authorities

 

What action should residents take

 

Who is responsible for deducting TDS & who will have pay the TDS & penalty to the government for TDS not deducted till date

 

Is the residents any way resposibble for non deduction of TDS

Replies (3)

THe question here is whether the residents are paying their share of bills on their own or is the association paying the same. If the assocciation is paying after collecting from the residents, then there is a risk of TDS liability. But if the residents are paying directly to the service provider, no TDS liability would arise for an individual resident. But if sme residents ( owners) are corporates/business concerns then they need to look out

Originally posted by : Rajagopalakrishnan R

Dear Mr Rajagopalakrishnan  

Thanks for your reply.

How ever the builder is not allowing the association to function & he has unilaterally entered into a contract with the service provider (& ssumed the role of the association ) & his agreement with the service provider clearly menions that the maintenance amount is for commoan head manitenance services (with no details for sun geads) & also there is a separate head for catering

Hence  is the builder's act of asking the payment to be done directly an act of TDS deduction avoidance on his part ?Will this also amount to  TDS Tax evasion

 

 

Venkatesh....a suggestion may be write a letter to your area it dept informing the name and address of the caterer and your building association practices and ask for clarification. Since the amt is high u may get a. Direction from the concerned a.o.

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