1. TDS on contractor is covered u/s 194C of the income tax act 1961. Tax (TDS) needs to be deducted for payments made to any contractor

-for carrying out any work or 

-for supply of labour in connection with any work.

2. TDS needs to be deducted provided-

a. The single payment to the contractor exceeds Rs.30,000/- or

b. The aggreegate amount of payments made during the year exceeds Rs.75,000/-

3. Applicability

This section is applicable to all the persons except the Individuals or HUF to whom tax audit u/s 44AB is not applicable in the preceeding financial year.

4. Rate of Tax:

a. For payments made for advertising contracts, TDS is 1%

b. For payments made to sub contractors TDS is 1%

c. For any other payments, TDS to be made is 2%

Note: TDS needs to be made at the time of payment or credit of the amount to the a/c of payee which ever is earlier.


Posted 3 years, 4 months ago by Mukesh Jain CA

A great post and really informative. Keep posting such great informations to help others.

Posted 3 years, 2 months ago by CA Pulkit Sharma

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