TDS U/s 194c by proprietor

TDS u/s 194C will have to be deducted even in case of an individual or HUF.
         
       Sec 194C(1)  i.e  payment to contractors was not amended by the Finance Act 2002 & therefore the limits under 44AB are not applicable here.

  However sec 194C(2) has been amended .Therefore in the case of payment to sub contractors the limits of 44AB will aplly.

Deduction u/s 194C will be applicable even to individual if its receipts exceeds the amounts specified in section 44AB

individuals (proprietorship firms) are not required to deduct TDS u/s 194 C

A properiotersip concern covered under tax audit has deducted tax on payments to contravrors on 31.03.2005 and had deposited on 15.06.2005 instead of 31.05.2005 as the time limit prescribed in IT Act. What will be the consequences with reference to Section 40(a).

When Individuals and HUFs, covered by sec. 44AB of the Income Tax Act, are making payment to contractors, they are not required to deduct tax at source. But when they  are making payment to sub contractors, they are obliged to deduct tax at souce from payment they are making to sub contractors, because they are clutched within sec. 194C(2) of Income Tax Act.

It is specifically provided in proviso to section 194C that an individual whose gross sales/gross receipts from business carried on by him exceed the monetary limits specified in section 44AB shall be liable to deduct income-tax under this sub-section.

I agree with Vishal.  Only payments to sub-contractors are applicable to individuals under Sec.194C(2).  Under sub-sec 1, individuals are not covered.  So payment to contractors by individuals is not subject to TDS and hence need not be reported u/s.44AB in clause 17(f).

Whereas section 194C(1) of the Income Tax Act, 1961 contains provisions for TDS by the contractee from the payments/credits to the contractors, section 194C(2) deals with payment/credits by the contractors to the sub-contractors. A proviso was inserted under sub-section (2) of section 194C w.e.f. 1st June 2002 to make liable an individual and HUF to deduct tax at source if his gross turnover exceeds Rs. 40 lacs. However, no such proviso was inserted under sub-section (1) of section 194C. Therefore, in my view-
(1)     TDS u/s 194C(1) shall not be deducted by the contractee, being an individual or HUF (irrespective of his turnover), for payments/credits to the contractors; and
(2)     TDS u/s 194C(2) shall be deducted by an individual/HUF contractors for payments/credits to the sub-contractors only if his turnover exceeds Rs. 40 lacs, i.e., monetory limits prescribed u/s 44AB.

Dear Mr Garg whether 194C(1) or (2) is applicable in case of sub -contractor makes payments to another sub-sub-contractors eg A is proproietor, B is contractor , C is sub contractor , D is sub-sub contractors . If posiible, pl provide your mobile no, i am stationed at Ahmedabad with regards

Please tell me about what amount TDS has been deposited by proprietor

TDS is applicable in case of individual only when it crosses the limit specified in section 44AB.

TDS has to be deducted on all contract expenses incurred by an individual or HUF, who are liable for audit u/s 44AB of Income Tax Act.

Hope God and U help me from the confussion with regard to TDS

U had said TDS has to be deducted on all contract expenses incurred by an individual or HUF, who are liable for audit u/s 44AB of Income Tax Act.  Can U clarify further from which period they are liable

Now there is one case wherein Proprietor has not deducted Tax in financial year 1.4.05 to 31.3.06 A.Y.2006/07 which has been Tax Audited u/s 44AB

while Audit the Auditor said the party is liable to deduct tax for payments from 01.04.06 onward say A.Y.2007/08 that is subsiquent year of first Tax Audit year.

In this case can you suggest is there any provision or circular which can be a evidence under the law of Income Tax which specify the Party is Liable for TDS on payments after tax audit year

Eagerly awaiting for your prompt reply

Thanking you

Ashok Patel

919869185880

919322032922

 

 

 

 

Hope God and U help me from the confussion with regard to TDS

U had said TDS has to be deducted on all contract expenses incurred by an individual or HUF, who are liable for audit u/s 44AB of Income Tax Act.  Can U clarify further from which period they are liable

Now there is one case wherein Proprietor has not deducted Tax in financial year 1.4.05 to 31.3.06 A.Y.2006/07 which has been Tax Audited u/s 44AB

while Audit the Auditor said the party is liable to deduct tax for payments from 01.04.06 onward say A.Y.2007/08 that is subsiquent year of first Tax Audit year.

In this case can you suggest is there any provision or circular which can be a evidence under the law of Income Tax which specify the Party is Liable for TDS on payments after tax audit year

Eagerly awaiting for your prompt reply

Thanking you

Ashok Patel

919869185880

919322032922

 

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