TDS HELP

TDS 870 views 5 replies

Pawan Mishra

Accountant

35 Points Joined July 2009

Sir, I am working as an Accounts Executive in Construction Co in Agra. i want to know what's the rate for tds on sub contractor and Tds Chart in present time. if one vendor turnover is exceed 10,00,000 Rs. than surcharge and E.cess applicable for Tds at present time? My E- mail ID is Pawan.ze @ gmail.com.

Thanks & Regards

Pawan Mishra

Replies (5)

CA. JIGAR SHAH

PRACTICING CA

42 Points Joined November 2007

FOR SUBCONTRACTOR THERE IS TDS OF 1%

No surcharge and cess is to be added from 01.04.2009 on tax deducted on nonsalary
payments made to resident taxpayers. It means that surcharges & cess is
not be included in basic TDS rates various situation are tabulated in table given
below

CA SUDHAKAR

CHARTERED ACCOUNTANT

189 Points Joined June 2008

With effect from 1.10.2009, following are the changes made in TDS on Contract Payments:

1. There is no difference of TDS rates between TDS to Sub-contractors and Contractors.

2. No Surcharge or Cess on TDS amount, rate of tax is only 1% or 2%.

3. There is no difference between Advertisement contract and other contracts.

4. Rate of TDS on contract is 1% in case of payment made to Individual/HUF and it is 2% in case of payment made others such as Firm/Companies etc

CA. Shwetank Vats

Chartered Accountant

653 Points Joined May 2008

So many file seen at this site related to TDS rate applicable w.e.f. 1-10-09 with comments that "No surchage or Cess is applicable for TDS w.e.f. 1-10-09, only the specified TDS rates should be considered for deduction applicable for AY 2010-11"

Surcharge is OK but regarding Edu. Cess (2% + 1%) not mentioned in any budget presentation/matter.

Please clarify source of input.

Madhukar

Finance

43 Points Joined April 2009

Do we need to deduct TDS for publishing / advertising in the annual report or Soverign

kapil kumar agrawal

Chartered Accountant

169 Points Joined August 2009

Hiii Friend I Think below para will be helpful to you in understanding the amendment:

Under the existing provisions of section 194C of the Income-tax Act, TDS at the rate of 2% is deducted on payment for a contract.

However, in the case of a sub-contract, TDS is deducted at the rate of 1%. Further, in the case of payment for an advertising contract, TDS is required to be deducted at the rate of 1%.

In order to reduce the scope for disputes regarding classificaton of contract as sub contract, it is proposed to specify the same rate of TDS for payments to both contractors as well as sub-contractors.

To rationalise the TDS rates and to remove multiple classifications it is also proposed to provide same rate of TDS in the case of payment for advertising contracts.

To avoid hardship to small contractors/sub-contractors most of whom are organized as individuals/HUFs,

it is proposed to prescribe following rates of TDS:

(a) 1% where payment for a contract are to individuals/HUF

(b) 2% where payment for a contract are to any other entity.

Nature of Payment (194C) Existing Prop rate**

rate (w.e.f. 1-10-2009)

Payment to —

a. Individual/HUF contractor 2% 1%

b. Other than individual/HUF contractor 2% 2%

c. Individual/HUF sub-contractor 1% 1%

d. Other than individual/HUF sub-contractor 1% 2%

e. Individual/HUF contractor/sub-contractor for advertising 1% 1%

f. Other than individual/HUF contractor/ sub-contractor

for advertising 1% 2%

g. Sub-contractor in transport business 1% nil*

h. Contractor in transport business 2% nil*

* The nil rate will be applicable if the transporter quotes his PAN. If PAN is not quoted the rate will be 1% for an individual/HUF transporter and 2% for other transporters upto 31.3.2010.