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TDS on Works contract

NANDAN (tax cunsultant) (417 Points)

18 March 2019

Dear Sir,
For example, I am a contractor, my sub contractor have give me 2 bills, one for materials cost used in work Rs.50 lacks, another for Labour cost for Rs.10 lacks. my query is should i deduct 1% TDS on both payment or only on labour cost that is Rs.10 lacks.?

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9 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 18 March 2019

Over Total amount of Rs.60 lakhs.

5 Like

Priya Kashyap (Student) (7048 Points)
Replied 18 March 2019

in case of works contract there must be a birth of immovable property (labour + services)
yeah it will be composite 60laks

1 Like

PRAKASH RATHORE (Student Cum Accountant ) (227 Points)
Replied 18 March 2019

1 % on Indivisual/HUF, Other 2%

1 Like

RAMAKRISHNAN R (INCOME TAX OFFICER) (1736 Points)
Replied 19 March 2019

in my opinion TDS to be deducted on only 10 lakhs

1 Like

priyanka rao (15 Points)
Replied 19 March 2019

I also opine that, tax is deductible only on labour cost

PRAKASH RATHORE (Student Cum Accountant ) (227 Points)
Replied 19 March 2019

but to be on safe side 2%

Deepika Dawale (student) (265 Points)
Replied 19 March 2019

For works contract, the order placed is for a job, and not material and labour independently. So, the invoice itself is invalid. Get the correct invoice for works done and deduct TDS on full amount.

4 Like

ram patil (12 Points)
Replied 19 March 2019

My actual idea is know where to keep the GOLD purchased by proprietor for personal use in tally(Under which Head). Gold(jewellery Purchased & used for personal use) Is not a fixed asset so the option is ruled out. Investments i suppose,not sure... can anbody tell me the proper head of account it should be placed in tally.