TDS on Advertising

New TDS rate u/s 194C of Income Tax Act, 1961 w.e.f. from 1st Oct. 2009 :-

Contracts to Transporter, who has provided a valid PAN 0%*

Contracts to Individuals/HUF 1 %

Contracts to others ( eg. Companies etc. ) 2 %

* If there is no PAN details, then @ 1% or @ 2%. From 1st April 2010 it is 20%.

No education cess and Surcharge in case of resident and 3% E.C. in case of non resident.

In your Case, first you will have to see status of Contractor in order to determine applicable TDS rate.

for example if contractor is Individual or HUF as the case may be then TDS will be deducted @ 1% in all types of Contracts. If Contractor is other than Individual/ HUF then applicable TDS rate will be 2%.

In order to clear your other associated query, i would like to inform you that w.e.f. basis of rate of TDS u/s 194c has been changed from nature of contract i.e. main contract or sub contract as earlier, tostatus of contractor i.e. Individual/HUF/Others as mentioned above.

I hope above information will be helpful for you and now you will be able to determine applicable rate of TDS u/s 194C. Feel Free to ask more about it, if any.

Lalit Talesara

( B.Sc. and Pursuing CA & CS )