Section 194C of the Income Tax Act 1961

Section 194C of the Income Tax Act 1961: Section 194C is the maximum famous phase amongst enterprise homes as this phase is basically concerned with Business Scenarios. While making any charge, TDS is mandatorily required to be deducted via way of means of the individual making. The charge if he’s at risk of deducting the TDS.

The charge at which the Tax is to be Deducted relies upon the character of the charge. Made via way of means of the Payer and in this newsletter on “Section 194C of Income Tax Act 1961. TDS on Payment to Contractors/Sub-Contractors we might be focusing at the Applicability, Non- Applicability, Threshold, Time of Deduction, Rate of TDS, etc. People operating withinside the money owed phase of any organization need to be having in-intensity expertise approximately. The provisions of Section 194C TDS on the charge to contractors.

 

 

Section 194C Applicability: TDS on Payment to Contractors/Sub-Contractors:

 

Section 194C of the Income Tax Act calls for any character to Deduct TDS at the same time. As making fee to a resident character, who’s wearing out any ‘work’ in phrases of the agreement among the ‘distinct character’ and the resident contractor, is needed to deduct TDS.

Now we want to, first of all, pick out the transactions on which Section 194C is applicable. If any fee is being made to the contractor under noted conditions then it’s miles answerable for deduction of Tax at Source:

 

Definition of Work as according to Section 194C of the Income Tax Act, 1961
The definition of word “Work” used is defined under :

 

• “Work” Must Include
  Advertising;
• Telecasting and broadcasting which include the manufacturing of packages for such telecasting and broadcasting;
  Other than railway, wearing of passengers or items through any mode of transport;
  Catering;
• Supplying or production a product as according to the specification or requirement of a purchaser through the use of cloth sold from such customers

 

Specified Person under Section 194C who’s required to deduct TDS:

 

• Any character, being a man or woman or a HUF(Hindu undivided family) or an AOP(an affiliation of persons) or a BOI(frame of individuals). Who’s susceptible to getting its Books of bills Audited u/s Section 44AB throughout the economic 12 months right away previous the economic 12 months. Wherein such sum is credited or paid to the account of the contractor. NOTE: Under Section 44AB a Business/Professional is needed to get its Books audited if the Turnover/Gross Receipts is extra than INR. 1 crore or INR. 50 lakh because the case can be.
• any partnership firm
• the Central Government or any State Government
• neighborhood authority
• organization mounted through or under a Central, State or Provincial Act
• any company
• any co-operative society
• authority constituted in India through or under any regulation. Engaged both for the cause of managing and pleasurable the want for housing and lodging or for the cause of planning. Improvement or development of cities, cities, and villages, or for both
• any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any regulation similar to that Act in pressure in any part of India
  any trust

 

 

Deduction of TDS u/s 194C at a Lower Rate:

 

According to Section 194C in which the AO is happy that the whole earnings of the contractor or subcontractor. Justify the deduction of earnings-tax at any decreased price or no deduction of earnings-tax because the case can be. The AO shall, on software made through the contractor or sub-contractor on this behalf provide to him such certificates as can be appropriate. The contractor or sub-contractor can then grant the decreased price or nil TDS certificates to the deductor.

Issue of TDS certificates:

 

In case of bills aside from income, TDS certificates are to be issued at the quarterly foundation in Form No.16A. As according to rule 31, Deductor of Tax from bills aside from income is needed to problem quarterly TDS certificates in Form No. 16A. The certificates is to be issued through the subsequent dates:

Issue of TDS certificates:

 

In case of bills aside from income, TDS certificates are to be issued at the quarterly foundation in Form No.16A. As according to rule 31, Deductor of Tax from bills. Aside from income is needed to problem quarterly TDS certificates in Form No. 16A. The certificates is to be issued through the subsequent dates:

According to CBDT Circular No. 1/2012, dated 9-4-2012, it’s miles the Deductors are mandatorily required to problem TDS certificates in Form No. 16A by producing the certificates thru the Traces Website (www.tdscpc.gov.in) with a completely unique TDS certificates number. The certificates so issued may be authenticated both through the use of the virtual signature or guide signature.