TAX DEDUCTED AT SOURCE ON CONTRACT AMOUNT

[SURYAKANT MITHBAVKAR]

We renewed our office premises and same contract has been given to interior with materials.

while making payment we have following descripancy.

While deducting Tax Deucted at Source - we have to consider contract amount with Taxes like Value Added Tax or only Contract amount (Excluding Taxes)

 

AI Summary

Tax deduction at source on contract payments must be calculated on the gross amount, inclusive of indirect taxes.
TDS on payments to contractors is required to be calculated on the gross contract amount, inclusive of taxes such as value added tax, rather than on the net amount after indirect taxes. Applicability depends on payer and payee classification, specified thresholds for deduction, and differentiated withholding rates for individuals/HUFs versus other persons.