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Tds on contract section 194c

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Abhishek Selvam O

374 Points Posted on 29 January 2020

While making payment to individuals or huf it is 1 percent and 2 percent for other than individuals or huf can a company deduct 2 peecent while making payment to individual

Replies (5)

Quick Summary

This discussion clarifies the Tax Deducted at Source (TDS) applicable under Section 194C for contract payments. It highlights that the TDS rate for payments to individuals is 1%, while for non-individuals (like companies), it's 2%. The thread confirms that while a company can technically deduct more than 1% for an individual, it is legally mandated to deduct only 1% as per income tax provisions. Refusing to deduct more than the prescribed rate is permissible.

RAJA P M

"Do the Right Thing...!!!"

128157 Points Posted on 29 January 2020

As per Income tax & TDS provisions Tds will be deductible @ 1% u/s 194C for Individual...

Kapadia Pravin

17269 Points Posted on 29 January 2020

As per section it is 1% for individual.

But more is always welcome by I T Department.

If you wish more to be deducted then no issues.

Or if Company insist on deducting more than 1% , you can decline / refuse and say that TDS is 1% only as per tax provisions.