Clarification - Sub-contractors payment

[BHASKER MURALI]

Dear sir, please clarify payment to sub-contractors is nil against submission of PAN No.? we are construction contractors we are using transporters for material shifting one place to another place and also we are paying to TCI like transporters TDS is NIL to this contractors too. please advoice

[Ravi Chopra]

The provisions of sub section (6) of section 194C as amended are reproduced as follows, "(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum."

[DEV KUMAR KOTHARI]

The reply of Shri Ravi Chopra covers about payment to transporters etc. In this case you will be required to furnish relevant information as may be prescribed. so keep a check on amendment of Rules in this regard. Bette obtain Xerox of PAN card with declaration from payees. IN your query you have said "sub-contractor". They are not exempt. Sub-contractor is now treated as contractor. Exemption is for transporter etc. who furnish PAN. This column of www.taxtmi.com is to initiate discussion and ascertain various possible views to further the object of learning and sharing knowledge and to clear doubts. The issue placed should include some basic information about the subject matter so that readers can at least have some idea about the issue, problem,related provisions and off course the views of the initiator of the issue. This will be helpful in getting better response from learned readers. In absence of the same, the readers cannot be serious about the issue and willing to spare time to merely provide information and solutions. This is my personal view.

AI Summary

Sub-contractor payments not exempt from TDS; Section 194C(6) exemption applies only to transporters with PAN. A discussion on a forum addressed a query about whether payments to sub-contractors are exempt from tax deductions upon submission of a Permanent Account Number (PAN). The response clarified that, according to amended Section 194C(6), no tax deduction at source (TDS) is required for transporters who provide their PAN. However, sub-contractors do not qualify for this exemption and are treated as contractors. It was advised to obtain a copy of the PAN card and a declaration from payees. The forum aims to enhance knowledge sharing and clarify doubts by providing basic information on such issues.