TDS on Incentive to Labour Contractor

577 views
User Avatar

Account Officer
653 Points Posted on 22 May 2020
Is TDS applicable on Invoice raised against Incentives paid to labour contractor
0 Reply Share Follow
On 22 May 2020 at 20:29 Report
Replies (3)
Quick Summary
This discussion clarifies whether Tax Deducted at Source (TDS) is applicable on incentive payments made to labour contractors. It confirms that such incentives fall under Section 194C of the Income Tax Act, treating them similarly to payments for labour contracts. TDS must be deducted if payments exceed the specified thresholds: £30,000 for a single payment or £100,000 in aggregate annually. The TDS rates are 1% for individuals/HUFs and 2% for other entities, with a 20% rate if PAN is not provided.

User Avatar

Partner
152 Points Posted on 22 May 2020

Dear Sir,

It will step in same shoes of labour contractor. Same section 194C.

Reply
On 22 May 2020 at 20:58
User Avatar

pro badge online

Finance/Compliance Consultant
69650 Points Posted on 22 May 2020

Under Section 194C you have to deduct TDS as mentioned below if you are making a one time payment exceeding Rs. 30,000/- or in aggregate yearly exceeds Rs. 100,000/- 

Rate of TDS u/s 194C

When provisions of section 194C of the Income Tax Act gets attracted, the Deductor is required to deduct TDS at the following rates –

Particulars Rate of TDS
Payment made / credited to an individual or HUF 1%
Payment made / credited to a person other than an individual or HUF 2%

However, in case the PAN is not furnished, the Deductor would be liable to deduct TDS @ 20% i.e. at the maximum marginal rate.

 

Reply
On 22 May 2020 at 21:03
User Avatar

Accounts Manager
298 Points Posted on 23 May 2020
Section 194C states any person responsible for paying 'ANY SUM"... that means it includes all types of payment.
Hence if it exceeded the threshold limit then TDS should be deducted.
Reply
On 23 May 2020 at 09:03

Leave a Reply

Post Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Recent Topics :

  1. Guidence requested for a Finance Professional with
  2. Expert Opinion Required – Form 140 Gross Amo
  3. WRONG TAX DEMAND - formal responses , rectificatio
  4. Foreign remittance
  5. Affordable Residential Flats in Gurgaon
  6. Manufacturing
  7. TAN REGISTRATION ON E-FILLING SITE
  8. Form 10-IEA – Continuing Old Regime
  9. Income tax act 2026
  10. Belated Return where Form 10IEA filed this year to

More recent discussions | Post

Related Topics :

Loading