Income tax · contractor TDS
Internal audit copy names section 194C for contractors and subcontractors when thresholds are crossed. Threshold amounts are not stated on this page.
The internal audit services page says section 194C applies to contractors and subcontractors when payments cross the threshold. The same page says section 194C has separate thresholds for single and aggregate payments in a year. Transporters may furnish PAN and declaration to avoid TDS under 194C in some cases.
Examples on that list include sub-contractor payments by main contractors, manufacturers deducting 194C on job work, security agency and housekeeping contracts, freight when transport is a service contract, and contractor payments by landowners during construction. Section 194C does not apply to payments for purchase of goods in most cases. Machinery hire without operator may not be 194C in some rulings; operator-provided equipment hire is often a 194C payment.
Some contracts may be 194C or 194J depending on facts, including annual maintenance contracts and call centre or BPO contracts on the internal audit list. Professional fees stay on the section 194J page. Building rent stays on the section 194I page.
The TDS on rent and contractors hub says rent of a building is 194I and 194C is for work contracts. Deductor quarterly filing stays on the TDS return filing page and the Form 26Q page.
The internal audit services page says section 194C applies to contractors and subcontractors when payments cross the threshold. It says section 194C has separate thresholds for single and aggregate payments in a year. This page does not state those threshold amounts.
Internal audit copy says section 194C does not apply to payments for purchase of goods in most cases. Works contract and labour supply are named as common 194C issues in construction.
Internal audit copy says machinery hire without operator may not be 194C in some rulings, and operator-provided equipment hire is often a 194C payment. This page does not decide a specific invoice.
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