Deduction of TDS with Charge

[Pradeep Jain]

Dear Sir,

We are engaging contractors who are giving services to us under Individual capacity.

We are not sure at the time of awarding contract that their services will exceed ₹ 1 cr. in one financial year.

Under such circumstances, in case we find in Mar-15 that a particular such contractor has provided services of more than ₹ 100 lacs and therefore we are liable to deduct surcharge @ 10% on TDS.

Our query is that, whether we are required to pay 10% surcharge on entire TDS deducted in the whole financial year (14-15) and pay? Whether it will be treated as default in payment of surcharge (TDS) and do we need to pay interest on delayed payment of surcharge?

Regards

Pradeep

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above issue? If not please inform.

AI Summary

TDS surcharge may apply retrospectively to annual TDS liabilities if threshold is exceeded mid year, raising default and interest concerns. The payer asks whether, if a contractor's services exceed the statutory annual threshold only late in the year, the TDS surcharge must be applied to all TDS deducted during that financial year, and whether delayed payment of such surcharge would amount to a default attracting interest or similar consequences.