Section 194C – TDS on Contractor Payments (Explained Simply)

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📘 Post #27: Section 194C – TDS on Contractor Payments (Explained Simply)

💸 Section 194C – TDS on Payments to Contractors

⚖️ What is Section 194C?

Section 194C of the Income Tax Act deals with TDS on payments made to contractors and sub-contractors for carrying out any work, including supply of labour.

🏢 Who Has to Deduct TDS?

✔️ Individual / HUF (subject to tax audit)
✔️ Company
✔️ Partnership Firm
✔️ LLP
✔️ Trust / AOP / BOI

👷 What Type of Work Is Covered?

  • Advertising

  • Construction & repairs

  • Transport services

  • Job work / fabrication

  • Catering

  • Labour contracts

💰 TDS Rates under Section 194C

• 1% – Payment to Individual / HUF contractor
• 2% – Payment to other contractors (Company / Firm)

📌 No surcharge or cess applicable

📉 Threshold Limits

TDS applicable if:

  • Single payment exceeds ₹30,000, OR

  • Total payments in a year exceed ₹1,00,000

📅 Due Dates

  • TDS deposit → 7th of next month

  • March payment → 30th April

  • TDS Return → Form 26Q (Quarterly)

📘 In Simple Words

“If you pay a contractor, TDS under Section 194C may apply — ignoring it can lead to interest & penalty.”

👨‍💼 Sujit Boliar
GSTJIT Advisory
📞 90642 63759
🔗 linkedin.com/in/sujitboliar



#TDS #Section194C #IncomeTax #ContractorPayments #TDSCompliance #GSTJITAdvisory #SujitBoliar #TaxConsultant #AccountingTips
 

Location: India

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