LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

TDS for Payment to Contractors in house construction

Sreejesh V K (ICMA Final Student) (147 Points)

25 February 2010

Hi All,

I m going to construct a new house for self use. During construction if I pay more than 50,000 to my contractor, is this liable for TDS??

Reply
Follow
Share

6 Replies

Max Payne (employed) (2569 Points)
Replied 25 February 2010

No need Sreejesh.

Tax Deduction is not required if the payments are for personal purpose by individual and HUF....

You can see the provision in section 194C.

1 Like

saranraj (CA FINAL) (419 Points)
Replied 25 February 2010

INDIVIDUAL OR HUF HAVE TO DEDUCT TDS IF HE/SHE IS SUBJECT TO TAX AUDIT DURING FINANCIAL YEAR IMMEDIATELY PRECEDING THE PREVIOUS YEAR.

FOR EG.

FINANCIAL YEAR 2009-10

ASSESSMENT YEAR 2010-11

IF YOU ARE PAYING AMOUNT DURING 2010-11, YOU MUST DEDUCT TDS ONLY IF YOU WERE SUBJECT TO TAX AUDIT DURING 2008-09.

1 Like

SRINIVAS SRIRAJ (Chartered Accountant) (130 Points)
Replied 25 February 2010

"[Payments to contractors.

⁷¹194C. (4) No individual or Hindu undivided family shall be liable to deduct income-tax on the sum credited or paid to the account of the contractor where such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family."

In the light of the above extract from the Income Tax Act, 1961, Tax need not be deducted at source from Contract (Personal) payments made by an Individual or HUF

1 Like