Tds under section 194c- work contract

under section 194C: A Company entered into a work contract with a resident contractor. During the execution of works, the contractor request to the company for making some advance payment directly to the sub contractor  on behalf of the resident contractor and recover the same amount from the contractor bills. For making the advance payment to sub-contractor, whether TDS should be deducted in name of resident contractor or deduct TDS in the name of sub-contractor or deduct TDS on both the parties,before making payment to sub-contractor under section 194C.

 

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The contract is with the main contractor and not with the sub contractor. You need to deduct the tax on the contractor though the payment in done to sub contractor. You need to settle the issue with the contractor by taking a letter or communication in writing stating that the contractor will again deduct the tax on the sub contractor to be on the safer side.

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