• I did not deduct TDS for one contractor - what now?

I have missed deducting TDS for one of the contractors. I have been paying him for the assignments. The money is usually in range of INR 10,000 to INR 45,000. However I have not deducted his TDS. The total I have paid him this year is around 5.8 lakhs. What can I do to resolve this?

Also do I need any undertaking from contractor?
Asked 6 years ago in Income Tax

First of all, it is important to know whether you were required to deduct TDS or not. You need to deduct TDS if you were liable to tax audit in the previous financial year.

If required as above, TDS had to be deducted @10% under section 194J. You can now deposit the TDS along with interest and file the TDS returns with late fees.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

This is considered as payment of professional fees under section 194J and not counted as a contract as per the provisions of 194C.

Also, for salaries, you need to deduct TDS in accordance with the computation of income of the employee and make deductions with regards to applicable slabs; and not at a flat rate of 10%.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

You can treat the contract as salary paid and deduct the TDS as per slabs applicable to him

Vidya Jain
CA, Kolkata
1008 Answers
58 Consultations

4.8 on 5.0

You have to deduct he TDS belated and deposit it. You will also have to revise your TDS return.

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Hii

if you have contract then 1% applicable under section 194C, but generally in software related work TDS u/s 194J @10% is applicable due to its professional nature.

Lalit Bansal
CA, Delhi
773 Answers
61 Consultations

5.0 on 5.0

Hello,

You may deduct and pay TDS on the entire amount now with interest and revise the first two quarter returns.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP

Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

Hi,

You may deduct now on the entire amount and pay the respective amount along with interest.

Also revise your previous TDS returns and issue him TDS certificates for every quarter to avoid further complications.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LL.B

Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
27 Consultations

5.0 on 5.0

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