Tds on construction works

if materil supply no tds if labor work 2% for company and for other 1%

Contract is including labour charge & material  also

then the payment u received minus tds 

Hi Vipin,

Yes you need to deduct TDS @ 2%. The liable to deduct TDS arises at the time of booking invoice or making payment, whichever is earlier. So If you make the advance payment, TDS liability arises. In case of composite contract i.e. include Labour and material. TDS is dedcutable. 

In case you need any further advice. you can contact me at ruchi.luthra @ icai.org

it is better if  tds is deducted for tax purpose for both 

parties and this is  march month is going on it will 

help u for reducing tax liability and here invoice 

is not given to come to know how much is material  

and labor 

Q.NO:1 When liability of deducting TDS arises (i.e.,whether on advance payment TDS has to be deducted?)

Liability to deduct TDS arise on 

a. on actual payment 

b.at the time of credit  which ever is earlier.

In this case as the payment (i.e., advance payment) is made earlier TDS has to be deducted at the time of payment.

Q.NO:2 Whether to deduct TDS on the value of Labour only or on both the value of Labor and material (Since do not know the segregation of labor and material)

Your case is a composite Case.( i.e., contract consists of both usage of materials and labor)

As the contractee is not supplying the materials to the contractor the contractee has to deduct TDS on both the value of material and labor i.e., on Gross payments. 

agree with above

thanks & regards