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Section 194C of Income Tax Act about TDS on Payment to Contractor

What Is the Meaning of 'Person' According to Section 194C?'

What Is the Meaning of 'Work' According to Section 194C?

What Is the Meaning of Contractor & Sub-Contractor as Per Section 194C?

What Is the Applicability of Section 194C of the Income Tax Act?

Conditions for TDS Deduction on Payment to Contractors as Per Section 194C

Conditions for TDS Deduction on Payment to Sub-Contactors as Per Section 194C

Conditions When TDS Deduction Is Not Applicable as Per Section 194C

When Is TDS Deducted Under Section 194C?

What Are the TDS Rates as Per Section 194C?

The TDS rates under Section 194C are mentioned below:

Payment Type

TDS Rates If PAN Card Is Available

TDS Rates If PAN Card Is Unavailable (on/after 1st April 2010)

Payment made to HUF or resident individual

1%

20%

Payment made to other resident apart from HUF or individual

2%

20%

There are a few pointers that individuals must note related to TDS rates under Section 194C:

  • The TDS rate is nil for transporters if they furnish PAN.
  • Payer will deduct TDS at base rates as no additional education cess, surcharges, and SHEC is applicable.
  • TDS rates from 14th May 2020 to 31st March 2021 was 0.75% for payments transferred to resident individuals or HUF and 1.5% for payments made to other residents besides HUF or individuals.

What Is the Time Limit to Deposit TDS as Per Section 194C?

The due date within which a taxpayer need to deposit TDS under Section 194C are stated below:

Payment Type

Due Date

When Government makes a payment or any other pays on behalf of the former

Same day on which the payment is made (without any challan form)

When the payment is credited or paid in March

On or before 30th April

When the payment is credited or paid in a month other than March

Within 7 days from the month's completion in which, a payer deducted TDS.

When to Issue TDS Certificate as Per Section 194C?

Payers must issue a TDS certificate while deducting TDS from payments except for salary in a quarter in Form No. 16A.

Due dates within which a payer must issue this certificate are:

Quarter

Due Dates for Government Payers

Due Dates for Non-Government Payers

April - June

15th August

30th July

July - September

15th November

30th October

October - December

15th February

30th January

January - March

30th May

30th May

What Are the Exceptions Under Section 194C of the Income Tax Act?

FAQs about Section 194C of Income Tax Act

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