The deductor must deduct the TDS with 1% if the payments are made to a person/HUF. And in all other cases at 2%. If the customer does not specify his PAN (Permanent Account Number), TDS must be deducted by 20%. For payments other than salary, TDS certificates must be issued quarterly on Form No. 16A. According to Rule 31, any person responsible for deducting tax on payments other than salary must issue a quarterly TDS certificate in Form No. 16A. The certificate must be issued on the following dates: during the year, the appraiser, a sugar manufacturer, made payments to carriers and did not deduct TDS from these payments. Both the evaluating official and the Commissioner (appeals) concluded that the evaluator was required to deduct TDS u/s 194C from the above payments. However, if TDS is filed in subsequent years, expenditures are authorized in the TDS payment year.
The deduction of taxes, since the entrepreneur is a justified payment, cannot be treated as a fee for technical services. [pp. 194J, 260A] `In addition, that exemption from TDS applies only to transport costs charged for the loading, rental or leasing of goods belonging to the transport undertaking. Therefore, when a person receives payments for the transportation, rental or leasing of property that does not belong to the person, he or she is not entitled to the TDS exemption for those payments. In ACIT v.M. Mohammed Suhail, Kurnool in ITA No. 1536/Hyd/2014, decision of 13.02.2015, was expressly stated that the provisions of Article 194C(6) are independent of Article 194C(7), and only because the provisions of Article 194C(7) are violated, a non-authorisation under Article 40(a)(ia) does not occur if the assessor complies with the provisions of Article 194C(6). Furthermore, in Soma Rani Ghosh v DCIT (ITA No. 1420 /KOL/ 2015), ITAT Kolkata, it was found that if the assessor complies with the provisions of Article 194C(6), no inadmissibility u/s 40(a)(ia) is allowed even if the provisions of Article 194C(7) are violated. This also applies if the total payment in a financial year exceeds Rs 1,000,000, which would be the scenario if the one-time payment to the entrepreneur is more than Rs 30,000 but less than Rs 1,00,000 per year.
Would TDS also apply to transactions of Rs.30k or all transactions below 30k? The annual payment is Rs.84000 Years: Article 194C only covers payments to resident contractors or subcontractors. TDS on payment to a non-resident contractor is subject to you/sec 195. No Carrier TDS: If the amount of the payment is made to a contractor in connection with the activity of transporting, leasing or leasing freight cars, no tax will be deducted from these payments if – Home » TDS on Payment to the Contractor or Subcontractor – Section 194C Section 194C of the Income Tax Act stipulates that any person who makes payments to a resident, any person who performs “work” within the meaning of the contract between the “specific person” and the resident contractor is required to deduct TDS. TDS is calculated based on the value of the invoice. Let`s understand with an example: Example: A Ltd makes the following payments to Mr. A during the 2019-2020 fiscal year, a contractor payment for couriers: Any payment to couriers is liable to TDS as it involves the transport of goods. (iii) Contracts for the supply of professionals cannot be regarded as contracts for the performance of `works`, so that no deduction of income tax can be made on payments related to such contracts under such contracts u/s 194C. Separate provisions for professional services fees have been established u/s 194]. A: Article 194C also covers the supply of labour. Payments to recruitment agencies have the character of a payment for services.
Consequently, the provisions of § 194C do not apply. However, payment is subject to TDS in accordance with § 194J. The Court dismissed the appeal against the revenues, finding that the appraiser had made payments only for maintenance contracts for minor repairs, replacement of certain spare parts, lubrication of machinery, etc. These services did not require technical expertise and therefore could not be classified as “technical services” within the meaning of Section 194J and the appraiser had correctly inferred TDS u/s 194C, which applied to payments to contractors. There was no question of law. Any person responsible for payment to the resident contractor/subcontractor must deduct the tax at the time of actual payment to the beneficiary or at the time of credit to the beneficiary`s accounts, whichever comes first. Note- Exception u/s 194C(6) applies only to contractors engaged in the transportation, rental or rental of freight cars. This exemption does not apply to passenger transport undertakings A natural person is required to deduct the withholding tax if his turnover exceeds Rs. .