TDS on solar plant

9467 views 6 replies

narayan maheswari

student

140 Points Posted on 14 November 2019

I have installed solar plant in my business premises. I received two tax invoices one is of rs. 265000 plus 18% gst for solar power generation system and second is 22000+ 18% gst for solar plant installation charges.
My ques is while making payment should I deduct tds or not?
If yes then under which section??

Replies (6)

Quick Summary

Solar plant purchase invoice is treated as goods purchase, so no TDS applies. Installation charges may fall under works contract (Sec 194C) but TDS applies only if threshold is crossed (Rs 30,000 per bill / Rs 1,00,000 aggregate). Since invoice is below limit, no TDS is required.

RAJA P M

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

128147 Points Posted on 14 November 2019

Tds not applicable in this transactions. One invoice is purely purchasing for goods...
The service invoice not exceeding 30k.
So, TDS not applicable...

Kapadia Pravin

17264 Points Posted on 15 November 2019

Solar power plant is purchase invoice of assets and there is no TDS on that.

Second is installation charges which is less than 30000/- ( the threshold limit of single bill) and hence no TDS under 194C is required to be deducted.

prakash patel

2 Points Posted on 15 November 2019

Installation is services for that applicable on TDS & actually single invoice limit is 30000/- so that on deducted TDS,

Akshay Soni

17 Points Posted on 29 July 2023

Originally posted by : RAJA P M

Tds not applicable in this transactions. One invoice is purely purchasing for goods...The service invoice not exceeding 30k. So, TDS not applicable...

BUT on Installation Charges tds applicable under 194c or 194j as it is technical services.?

Akshay Soni

17 Points Posted on 29 July 2023

BUT on Installation Charges tds applicable under 194c or 194j as it is technical services.?

Read more at: https://www.caclubindia.com/forum/tds-on-solar-plant-535050.asp?offset=1#reply

Amit Bajpayee

22 Points Posted on 20 May 2024

Tax Deducted at Source (TDS) applies to solar plant installations in specific cases. When a contractor handles the installation, TDS under Section 194C is deducted at 1% for individuals and 2% for companies. For professional services like consultancy, TDS under Section 194J is 10%. If renting land or space for the solar plant, TDS on rent under Section 194-I is 10% for land and 2% for machinery. Direct purchases of solar panels usually do not attract TDS unless part of a contractor's overall bill. Compliance involves obtaining a TAN, deducting TDS at payment or credit, depositing it with the government, and filing quarterly returns. Individual homeowners typically do not need to deduct TDS unless engaging contractors for substantial amounts. Always consult a tax professional for precise compliance.