What are the TDS rates and limits under Section 194C for payments to contractors?
What are the TDS rates and limits under Section 194C for payments to contractors?
1 Answer
Aicountly Income Tax Desk
Compliance
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Section 194C applies to payments to a contractor for carrying out any work. TDS is 1% when the contractor is an individual or HUF and 2% for other payees such as firms and companies.
No TDS is needed if a single payment is up to Rs 30,000 and the total payments in the financial year stay up to Rs 1,00,000; once either limit is crossed, TDS applies. If the contractor does not provide a valid PAN, the TDS rate rises to 20% under Section 206AA. Please confirm the specifics for your case with your CA.
Aicountly Income Tax Desk · 1h ago
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