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Tapan Kumar Dhar (D.M(HR))     10 August 2013

Applicability of tds u/s 194c

Our organisation engages labour supply contractors for getting the  specified job done.

They engage contract labour & at the end of the month the contractor raise bills which includes wages payable to the contract labour deployed by them, Contractors commission, applicable service tax.

TDS is deducted on bill amount & deposited to govt.

When contracted employee retires or resign the company credits  the gratuity amount to contractor & issues cheque by debiting to contractor account. Contractor pays the gratuity to that retired/resigned employee out of the fund received from our organisation. Gratuity amount is less than Rs. 10 Lakh. No commission is paid to Contractor for such transaction.

My Question is :

1) Whether crediting the gratuity amount to Contractor in such case attracts TDS u/s 194C ?



Learning

 1 Replies

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     11 August 2013

 Under the Indian Income Tax Act, the following provisions relate to the Tax Deduction at Source from payments to Contractors and Subcontractors under section 194C.
  •  Person responsible for paying any sum for carrying any work to any resident contractor should deduct tax at source.
         
  •  Tax should be deducted at source only if the contract is between the contractor and the following specified persons:


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