Sec 194C – TDS on payment to Contractor or Sub-Contractor

Last Updated on August 12, 2019 by Ravi Sankar Robbi

Applicability:

Any specified person is responsible for paying any sum to a resident contractor/sub-contractor

For carrying out any work and

If such payment exceeds Rs. 30,000 in a single payment or exceeds Rs. 1,00,000 in aggregate during the financial year

Tax should be deducted by payer @1% – If payee is Individual or HUF (No SC,EC & SHEC)

@2% – If payee is any other person other than Individual or HUF (No SC,EC & SHEC)

At the time of credit of such sum to the account of payee or at the time of payment whichever is earlier.

Exceptions:

The following payments will not attract TDS u/s 194C.

1. Payment to transport contractor (Contractor can be Individual, firm, company or any other person), if such TC – furnishes PAN, Owns not more than 10 goods carriages at any time during the previous year and furnishes declaration.
2. Payment by an Individual / HUF to resident contractor for personal purposes.
3. If such payment does not exceed Rs. 30,000 in a single payment or Rs. 1,00,000 in aggregate during the financial year.

Ravi Sankar Robbi

Author is a Qualified CMA with an experience of more than 8 years in the industry. He is also an All India Rank holder in both Inter (AIR-26) & Final (AIR-46) examinations of ICAI. He loves to writes articles on Income Tax & GST.