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Till 31.5.2016

 Section

 Description

 Cut off

 Rate of TDS

Section 194 C

Payment to Contractors

75000 p.a. or

30000 single Contract

 

1 % (Individual / HUF)

or

2% (Partnership / Companies)

Section 194C Limit increased to 100000 per annum from 1 june 2016

From 1.6.2016

Section

Description

Cut off

 Rate of TDS

Section 194 C

Payment to Contractors

75000 100000 p.a. or

30000 single Contract

 

1 % (Individual / HUF)

or

2% (Partnership / Companies)

 

Services covered in 194C

Services normally not covered in 194C

Those services which are not falling in any section taxable under 194C

Example

(1) Taxi services

(2) Security guard

(3) House keeping

(4) Printing

(5) Employers on contract

(blue collared)

(6) Advertisement Service

(1) Freight Service

Refer Note Below

(2) Utility bills

[Telephone / electricity / water]

If paid direct to agency no TDS

 

Section 194C TDS on Contractors - Understanding Basics

Rate of TDS under 194C

1% = Individual / HUF
2% = All others like
(a) Companies (Pvt. Ltd.)
(b) Companies (Ltd Co.'s)
(c) Partnership
4th digit of pan to be checked

194C Bill.jpg

pan no. format.png

 

Fourth Digit

Constitution

Rate of TDS in 194C

P

Proprietor

1%

F

Partnership

2%

C

Company

[Both private & Limited co.’s]

2%

Q1.
Security Guard bill received of Rs. 10000 pm. for April.
-a-
Since amount paid during year = 10000 ×12
= 120000
Since amount paid is more than 75000 p.a.
TDS under 194 C applicable


Q2.
What is the rate of TDS in Q1 If Security guard bill is paid to

Party name

Pan no

Rajesh

BBUPR5192h

Rajesh Private Limited

BBUCR5192h

Rajesh Limited

BBUCR5192h

Rajesh & Co.

BBUFR5192h

BBOPR5192h

Rajesh Associates

BBUFR5192h

BBOPR5192h

View Answer

 TDS on Transport Charges

Transport is of 2 types

1,Passenger Transport (Cab Charges)

2 Goods Transport (Freight Charges/Truck Charges)

 

1,Passenger Transport (Cab Charges)

In this case,Section 194 C is applicable

TDS is to be deducted @ 1% if Cab Operator is Individual/Proprietorship

And 2%  if Cab Operator is Partnership/Company

 

Goods Transport (Freight Charges/Truck Charges)

 In this case,Section 194 C is applicable as follows

            Case

                   Rate of TDS

If Pan Number Provided

 

No of trucks upto 10-

No TDS

No of trucks > 10

TDS @ 1%/2% under Section 194C

 

If Pan not provided

TDS is to be deducted @ 20%

 

No of trucks not relevant)

 How to determine number of trucks?

The truck operator will give declaration in writing that he has x.number of trucks

If truck operator does not give declaration,then assume he has more than 10 trucks and deduct 1%/2% TDS

 

 

 

 

 

 

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About the Author

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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