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Tds on contracter 194c

ABHI KUMAR (637 Points)

24 April 2023

for house construction payment paid to contractor amount exced 1 lac need to tds deduct or not

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10 Replies

Hashir Muneeb (6 Points)
Replied 24 April 2023

If amount is exceeds 1 lac within the F.Y, then it's mandatory to deduct TDS.

sabyasachi mukherjee (26067 Points)
Replied 24 April 2023

There is no such rule.
Payment or booking of bills whichever is earlier.

ABHI KUMAR (637 Points)
Replied 24 April 2023

But we opted 44ad

Hashir Muneeb (6 Points)
Replied 24 April 2023

@ Mukherjee - I would be glade to hear from you, how you would say that "There is no such rule". As per IT Act Sec 194 C narrates single transaction upto 30,000 & aggregate upto 1 lac TDS is applicable..

Please explain!!

shreya vora (69 Points)
Replied 24 April 2023

(since you have opted for 44AD, audit is not required... )hence no TDS has to deducted if a person making the payment is an individual or HUF whose books are not required to be audited

ABHI KUMAR (637 Points)
Replied 24 April 2023

If we audited our account nd payment to contracter for house construction den tda deduct or not ...

shreya vora (69 Points)
Replied 24 April 2023

Yes then u r required to deduct tds if limit exceeds. (30k per transaction or 1L agg in whole F.Y.)

ABHI KUMAR (637 Points)
Replied 24 April 2023

But 22.23 fin year after march we decided to get audited our account nd fin year 22.23 we paid contracter to paid 1.5 lac so wat can i do . till 21.22 fin year we opted 44ad sceme

Sowmya.G (CA) (459 Points)
Replied 26 April 2023

TDS will be applicable from FY 22-23 when you opt for audited accounts.

Bharat Kumar (6 Points)
Replied 29 April 2023

If the payment for house construction is made by a company, TDS is required to be deducted under section 194C of the IT Act, if the total payment made or to be made to the contractor exceeds Rs. 1 lakh in a FY.

The TDS rate for payments to contractors under section 194C is 1% for individuals and HUF and 2% for other entities.

If the payment is made by an individual, TDS is not required to be deducted under section 194C, provided the individual is not liable to get audited under section 44AB of the Act.