Tds to contractor(for construction)

You have deduct  TDS  as per section 194C of the income tax act 1961  at time of credit of such to the account of the contractor or at time of payment thereof in cash or by way of issue of cheque or draft any other mode .

TDS IS TO DEDUCTED AT THE TIME OF MAKING PAYMENT OR CREDIT WHICH EVER IS EARLIER. HOWEVER IN FOLLOWING 7 CASES TDS IS TO BE DEDUCTED ON PAYMENT BASIS: 1. SALARY   2.DIVIDENDS    3. WINNING FROM LOTTERY OR CROSSWORD PUZZLE   4.WINNING FROM HORSE RACE  5.PAYMENTS IN RESPECT OF DEPOSITS YNDER NSC   6. PAYMENTS IN RESPECT OF REPURCHASE OF UNITS BY MUTUAL FUND OR UTI    7.PAYMENT OF COMPENSATION ON ACQUISITION OF CERTAIN IMMOVABLE PROPERTY.

Mahesh G,

As per sec 194C

The person responsible for making payment to resident contractor/sub-contractor should deduct TDS,

• either at the time of crediting such sum to the account to the payee or
• at the time of payment thereof in cash or
• by an issue of a cheque or by any other mode, whichever is earlier.

As you said you made payments in Installments, then you have to deduct TDS as and when you make payment over the Installment Amount.

If you knows that the payment to contractor will exceeds 100000 during the year then deduct TDS on each Payment to Contractor.

Or if you can't predict that payment would exceeds 100000 then don't deducd TDS till the time payment does not exceeds limit.

In future if that payment to contractor exceeds 100000 then deduct TDS on whole amount which you have paid till that time.

Originally posted by : Rajkiran Ghosh
	but in a payment if the amount is rs 40000 in a f.y and i cannot predict whether in future if there will be the further patment then can i deduct tds on rs 40000???as tds limit will exceeds of rs 30000 in a single payment... please clear me sir

Also, if single time payment exceeds Rs. 30000 then you have to deduct TDS

if you have deducted tds on first payment of 40000 then deduct Tds on all payment after 1st payment