TDS LIABILITY

tds liability  arise in the following case....

tds will be deducted because cummulative bill amount is more than thresh hold  limit. does not matter whether  payment made in installment or other wise

TDS Liability arises in your case as the Single Invoice amount is Rs.25000/-, (No matter that the payment are made in installments), but in order to get releived from TDS Liability one can take two different invoices for which the single invoice amount will be less than Rs. 20000/-(Rs. 30000/- w.e.f 01.07.2010)  and the contract amount for the year does'nt exceeds Rs. 50000/- (Rs.75000/- w.e.f 01.07.2010)

The views expressed by the L'd members above are absolutely correct

Dear Ravi,

The amount of Rs.25000/- is billed in a single invoice and which is more than the exempted limit of  Rs.20000/-,

thus the Tds @ 2% (1% if the contractor is an individual) is applicable on the bill, irrespective of the payment mode, whether the payment is made in installments or lumpsum. Hence, to avoid the Tds in this case, you can ask for two invoices for the said amount, keeping in mind that no invoice is billed for more than Rs.20000/-

-Srinath

Q. TDS deducted on Payament of contractor Exceeds in a year Rs. 75000.

     suppose work done till jan Rs. 74000 and Rs. 2000 work done in feb.

    liabilities on deducted tds arise but interest on tds is applicable. on total Rs. 76000 ?

    on the basis of amt. credit or paid whichever is eairlier person will liable to revised the tds return or. not.?