Tax Deducted at Source – Section 194C

Tax Deducted at Source – Section 194C

Tax Deducted at Source – Section 194C

(Angeleena Roy, Articled Associate)

 

192 : Salary
  • Deals with tax deducted at source (TDS) on salary.
  • The employer is responsible for deducting TDS on an average rate of income tax based on the current slab rate during the relevant financial year by considering the estimated income.
  • The TDS deducted u/s 192 is reflected in Form 16, which is issued by the taxpayer at the end of the financial year.

 

“Work” Includes
  • Advertising
  • Broadcasting and telecasting including production of programs for such broadcasting or telecasting
  • Carriage of goods and passengers by any mode of transportation, other than railways
  • Catering
  • Manufacturing or supplying of a product according to the requirement or specification of a customer by using the materials purchased from such customer

(Work does not include manufacturing or supplying of a product according to the requirements or specifications of a customer by using the materials purchased from a person, other than such a customer.)

 

“Specified person” shall mean,—

(a) the Central Government or any State Government; or
(b) any local authority; or
(c) any corporation established by or under a Central, State or Provincial Act; or
(d) any company; or
(e) any co-operative society; or
(f) any authority, constituted in India by or under any law, 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; (example: CIDCO , HUDCO)or
(g) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or
(h) any trust; or
(i) any university established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or
(j) any Government of a foreign State or a foreign enterprise or any association or body established outside India; or
(k) any firm; or
(l) any person, being an individual or HUF or an AOP or a BOI subject to Tax audit u/s 44AB(a)/(b) in the immediately preceding FY

44AB (a)/(b)
[has total sales, gross receipts or turnover from business or
profession carried on by him exceeding 1 crore rupees in case of business or 50 lakh rupees in case of profession]

 
Threshold Limit

TDS is to be deducted under this section if,

  • Amount credited or paid or likely to be credited or paid to a contractor or subcontractor
    • exceed Rs. 30,000 in a single payment

OR

    • Rs. 1,00,000 in the aggregate during the FY
Rate of TDS?
Sl NoNature of PaymentTDS Rate if PAN Available
1Payment / Credit to resident individual or HUF1%
2Payment / Credit to any resident person other than individual/HUF2%
3Payment / Credit to transportersNIL

*If PAN not available? 
TDS RATE = 20%

Non applicability of TDS u/s 194 C
  • No deduction is required to be made from any sum credited or paid or likely to be credited or paid during the PY to the account of a contractor ,
  • During the course of the business of plying, hiring, or leasing goods carriages,
  • If the following conditions are fulfilled :