Tds for interior work contract

The nature ofjob will determine the nature of TDS too!. Is your friend offering advisory on how the interior should be done ( design drawings or plain advice) or is he doing the interior job work itself. The first one would be Tech fees, second be contract. Note that whenever delivery of material and labour in a composite form is involved it can only be a contract and not tech or prof fees.

Originally posted by : Rajagopalakrishnan R
	The nature ofjob will determine the nature of TDS too!. Is your friend offering advisory on how the interior should be done ( design drawings or plain advice) or is he doing the interior job work itself. The first one would be Tech fees, second be contract. Note that whenever delivery of material and labour in a composite form is involved it can only be a contract and not tech or prof fees.

Sir,

The work nature itself is contract which include supply of material and labour as well.

For your friend's case:

• Executing interior work (carpentry, false ceiling, furniture fit-out, painting) to the client's specification is "work": Sec 194C at 1%/2%.

• Only interior design or advisory (drawings, concept, consultancy) is professional: Sec 194J at 10%. "Interior decoration" is a notified profession under Sec 44AA.

• If the client deducts 10% wrongly, there is no loss, only cash flow: the full TDS is creditable in his ITR (Sec 199). He can ask the client to file a correction statement, or obtain a lower deduction certificate under Sec 197 for future bills.

• For mixed design-and-build contracts, ask for separate invoices or contract heads. Otherwise deductors take the higher rate.

• GST: works contract for immovable property at 18%. The client cannot claim ITC on fit-out of its own building (Sec 17(5)(c)/(d)).

• From 1 April 2026: Sec 393 of the Income-tax Act, 2025.