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Why tds was deducted ?

punsgaur (Others) (25 Points)

15 November 2012

I have printed medical journal in delhi & delivered it to my client in Mumbai.

I had prepared a bill and sent to the client of X amount.

No DVAT or CST was applicable for my goods.

Client deducted 10% TDS on total amount and sent me the payment.

Why was tds deducted ?

I am not getting an answer from the client.

Thanks

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7 Replies

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 15 November 2012

The client has deducted tax at source under section 194C as a 'contract'. It has interpreted that you have rendered a service or a job or executed a work.

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 15 November 2012

Te client should have deducted @ 1% or 2%. 10% is not the correct rate. It is for professionals.

DAYANANDA K N (ACCOUNTS EXCECUTIVE) (575 Points)
Replied 15 November 2012

Supply of printed material as per the prescribed specification will attract TDS under Sec 194C. Hence i belive buyer should have deducted TDS. But % under sec 194C should be 2%/1%.

Regards

Dayananda

1 Like

KARANDEEP,CA,B.Com,CS FNL (JOB) (457 Points)
Replied 15 November 2012

In layman langauge....it is the requirement of the income tax Law.

Thanks & Regards

Karandeep

(Guest)

Printing of any journal attract sec 194C, in this case if payment is excess of Rs. 30000/- per contract or Rs.75000/- Per annum. aggregare. @ 1% for the non -corporaqte contractor and 2% for corporate contractor.

in your case your vendor conciderd it as professional service which is u/s 194J @ 10% which is incorrect bifurcation since you have only provided printing service. suppose if it was your journal i.e written by u then 194J @ 10% was correct.

in your case the tds leviable @ 1% u/s 194C if non-corporate or 2% incase of corporate.

Thanks