TDS 194C.pptx

TDS 194C

1. TDS (Simplified aspects of Tedious Process) By S. Somasundaram

2. Income Tax Act 1961 Chapter XVII – Collection and Recovery of Tax Section 190 to Section 234F In Budget 2020 a new section 234G is inserted (Late Fee Rs 200 for delay in Return prescribed u/s 35, 80G) Section - 194A : Interest other than “Interest on securities” Section - 194C : Payments to contractors Section - 194H : Commission or brokerage Section - 194I : Rent Section - 194J : Fees for professional or technical services TDS e-filing, Form 16A Generation, Correction of TDS Statements Scope of this Program

3. 194C Payments to contractors Any person responsible for paying any sum (Specified Person) to any resident for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract / sub contract between the contractor and a specified person To Whom applicable

4. When to deduct at the time of credit of such sum (Accounting Date) to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier Rate of TDS Receiver of Payment / Deductee Rate of TDS Individual / HUF 1% Any Person other than Individual / HUF 2%

5.  “Specified Person"  Central / State Govt Local Authority Any Corporation by Central / State / Provincial Act Any Company Any Co-operative Society Any Trust Any University / Deemed University Any society Societies Registration Act, 1860 or any law corresponding to that Act any firm

6.  “Specified Person"  Any Government of a foreign State or a foreign enterprise or any association or body established outside India Any authority, engaged Either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both

7. “Specified Person"  any person, Individual / HUF / AoP / BoI, if such person,— ( A ) does not fall under any of the preceding sub-clauses; and ( B ) is liable to audit of accounts under clause ( a ) or clause ( b ) of section 44AB  during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor; Position before Budget 2020

8. “Specified Person"  any person, Individual / HUF / AoP / BoI, if such person,— ( A ) does not fall under any of the preceding sub-clauses; and ( B ) “has total sales, gross receipts or turnover from business or profession carried on by him exceeding 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 to the account of the contractor; Position after Budget 2020

9. Work advertising; broadcasting and telecasting including production of programmes 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, 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. 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 [Refer: 40A(2)(b)]of such companies Pre Budget Post Budget

10. Does Name has anything to do Any sum u/s 194C is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income (Specified Person) such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. Note: Direct credit to Party a/c Ledger is not necessary. Provision Entry will also attract TDS. Expenses Payable Account breakup list is necessary to identify party

11. TDS on Contract Payment No TDS by Individual / HUF – Exclusively for personal purposes Business of plying, hiring or leasing goods carriages, If Contractor owns ten or less goods carriages (44AE) at any time during the previous year and furnishes a declaration to that effect along with his PAN, to the person paying or crediting such sum Transaction / Payment Type Threshold Limit for NIL TDS Single Amount Credited / Paid / likely to be credited or Paid Rs 30,000/- Aggregate of the Amounts Credited / Paid / likely to be credited or Paid Rs 1,00,000/-

12. Codes used in RPU 94C for Section 194C 01 for Company 02 for Non Company Reason for Lower / Higher / NIL Deduction Code Category A Lower / NIL Deduction Certificate u/s 197 C “PANAPPLIED”, “PANINVALID” or “PANNOTAVBL” Higher TDS Rate for no PAN T In case of Transporter transaction and valid PAN is provided Y Within Threshold limit – Hence no TDS Z Notified Organization u/s 197A (1F)