Section 194C – TDS on Payment to Contractor

• November 25, 2020
• CA Chandan Agarwal's Office

1) Who is responsible to deduct tax u/s 194C?

Any person, other than an Individual or HUF, responsible for making payment to a resident contractor or sub-contractor for carrying out any work (including supply of labour) is liable to deduct tax at source under Section 194C.

However, an Individual or HUF, AOP/BOI is liable to deduct TDS under section 194C, if total sales, gross receipts or turnover exceed one crore rupees in case of business or fifty lakh rupees in case of profession during the financial year immediately preceding the financial year in which such sum is credited or paid.

 2) Which works contract is covered under Section 194C?

Works Contract includes:

• Advertising
• Broadcasting and telecasting including production of programs for such broadcasting or telecasting
• Carriage of goods or passengers by any mode of transport other than by railways
• Catering
• Manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer or its associate covered u/s. 40A(2)(b), but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer or associate of such customer.

Read more on: https://taxguru.in/income-tax/section-194c-tds-payment-contractor.html