tds on contract 194c

[amit r]

if i have construction the capital asseates(building)those work i have give to contractor.tn those case tds is applicable or not.& pls sent case law relared .

AI Summary

TDS under Section 194C applies to construction contracts; separate billing for materials like cement avoids TDS. A query was raised about the applicability of Tax Deducted at Source (TDS) under Section 194C on a construction contract for capital assets like buildings. The response clarified that TDS is applicable regardless of whether the contract pertains to capital or revenue items. However, TDS does not apply to the cost of materials like cement and bricks if these are separately itemized in the bill. It is advised to issue separate bills for such materials. Failure to deduct TDS on revenue expenditure could lead to disallowance of expenditure under Section 40(a)(ia).