I have a small query, In regard to sec 194c towards tds on contracts, it is unclear on the nature of the contract whether the contract should be duly signed by the parties and on paper (in writing) or whether an implied or a verbal contract (or sometimes not even a contract i.e., say u pay a newspaper towards advertising a certain sum every month without entering into a contract), will they deem to be a contract and shoul tds be deducted on the amount payable??
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TDS on Contract
Replies (9)
As per Contract Act, 1872 both type of contract whether written or oral are contract.
So both are considered for section 194C.
Moreover you will be receiving the bills and that is also a proof that you have a contract with the other person.
Sudhanshu is right. You have to deduct TDS u/s 194(C) if the single Bill exceed Rs. 20000 and Multiple bill exceed Rs. 50000/-
both written or verbal are considered for section 194C.
Sec 194C of the Income Tax Act, 1961 requires u to deduct tax at source when u r making any payment in pursuance of a contract...no where it is specified that it should be a written contract. So even in case of oral contract or understanding the provisions of section 194 C will be applicable.
Regards
Kanti Jain
Verbal contracts if can be proved to be genuine are always equivalent to written ones..
Agree with kantijain Sir.
The limit has now been enhanced to Rs 30,000/- and Rs 75,000/- for single and during the year respectively.
Thanks.
Enhanced limit is applicable from 1 July 2010 onwards.
in this case tds can be oral n written both r legal contract u/s194c, as u say pay to newspaper for advertising every month specified sum of money u should deduct tds if single amt. exceeds Rs.30000 and lumpsum amt. Rs 75000 in a year.....
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