Query on TDS:
If X is a Co. which has entered into a contract with a clearing agent & doing TDS for such accordingly and in that course if the clearing agent collects any demmurage charges do we need to deduct TDS under 194-C
Ans
Law: Section 194C (1) provides that any person responsible for paying any sum to any resident contractor, for carrying out any work in pursuance of a contract, shall deduct tax at source at a specified percentage.
Clarification by Circular No. 715, dt. 8-8-1995:
Circular No. 715, dt. 8-8-1995 has clarified that sections 194C and 194-J refer to any sum paid. So, reimbursements cannot be deducted out of the bill amount for the purpose of tax deduction at source.
In above case
If the bill amount includes the demmurage amount TDS has to deduct. Unless seperate bill isued for the same
If X is a Co. which has entered into a contract with a clearing agent & doing TDS for such accordingly and in that course if the clearing agent collects any demmurage charges do we need to deduct TDS under 194-C
Ans
Law: Section 194C (1) provides that any person responsible for paying any sum to any resident contractor, for carrying out any work in pursuance of a contract, shall deduct tax at source at a specified percentage.
Clarification by Circular No. 715, dt. 8-8-1995:
Circular No. 715, dt. 8-8-1995 has clarified that sections 194C and 194-J refer to any sum paid. So, reimbursements cannot be deducted out of the bill amount for the purpose of tax deduction at source.
In above case
If the bill amount includes the demmurage amount TDS has to deduct. Unless seperate bill isued for the same
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