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Tds u/s 194c of it act, 1961

CA dhanpat raj (consultant) (83 Points)

22 March 2016

As we know that TDS is to be deducted on payment exceeds rs. 75000/- aggregate during the the year u/s 194C but is we made payment like this eg. 20000/- on 17/06/2015, 25000/- on 15/08/2015, 30000/- on 19/10/2015 and 28000/- on 01/01/2016 then how & when we deduct TDS on 20000/-, 25000/-, 30000/- ? i.e. on day on which it exceeds limit of 75000 ?

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15 Replies

Amit Kanunga (Article Assistant and Post Gradute) (644 Points)
Replied 22 March 2016

U must have to deduct tds on the date 19/10/2015. but u have to deduct TDS on Full Amount thats

20000 @ 10%=2000

25000 @ 10%=2500

30000 @ 10%=3000

28000 @ 10%=2800

So from the last payment which is u paid thats Rs. 28000. from this u have to deduct TDS. Ths Amount Will be

=2000+2500+3000+2800

=10,300

So ur net Payment will be Rs. 17,700 (28000-10300)

From now onwards u have to deduct tds for the current period and further period also.

Amit Kanunga (Article Assistant and Post Gradute) (644 Points)
Replied 22 March 2016

Hope u get full idea.

CA dhanpat raj (consultant) (83 Points)
Replied 22 March 2016

THIS WILL APPLY TO 194I AND 194J OF it ACT

Amit Kanunga (Article Assistant and Post Gradute) (644 Points)
Replied 22 March 2016

Yes u must have to Follow for the all TDS liability which Occurs.

CA dhanpat raj (consultant) (83 Points)
Replied 22 March 2016

I also want to ask that octroi charges paid is cover u/s 194C for TDS deduction

Amit Kanunga (Article Assistant and Post Gradute) (644 Points)
Replied 22 March 2016

No it doesnot cover under TDS.

CMA Poornima Madhava (CMA) (13097 Points)
Replied 22 March 2016

First of all, rate of TDS u/s 194C is either 1% (in case the deductee is individual/HUF) or 2% (for others)
Threshold limit of Rs.75,000 exceeds on 1/1/16 and hence you need to deduct tax at source on the entire payment/credit (of Rs.1,03,000/-) Rs.on 1/1/16 @ 1% or 2% as applicable
Further, you will have to pay interest @ 1.5% p m (if TDS is not paid before 7/2/16)

CMA Poornima Madhava (CMA) (13097 Points)
Replied 22 March 2016

Octroi is a statutory liability paid to local authorities. It is not an expense and hence no TDS is applicable on payment of octroi

1 Like

CA dhanpat raj (consultant) (83 Points)
Replied 22 March 2016

thanks

Ashok J (CA Final) (880 Points)
Replied 22 March 2016

So in tds return shud we show it as 103000 is paid in q4??

CA Harsh Kothari (Consultant) (302 Points)
Replied 23 March 2016

In this case, the assessee shall also be liable to interest for late deduction for the amounts paid prior to 19/10

CMA Poornima Madhava (CMA) (13097 Points)
Replied 23 March 2016

@ Ashok: yes, you are right @ Harsh: interest is payable only from Jan

JAYS (MBA) (97 Points)
Replied 23 March 2016

It was really easy explanation..by.. Poornima.....Thanks..

CA dhanpat raj (consultant) (83 Points)
Replied 23 March 2016

if we contract with particular person who supply tea, coffee, snakc etc to office and bill amount goes to 100000 during the year then such amount liable to deduct TDS u/s 194C of IT act.

if above payment liable to TDS then- in above sentence "contract" word removed then also it is liable u/s 194C.