TDS on payment made to state government department

[Common Issues]

Can public limited company or any other person is liable to deducted TDS from the payment made to  State Government Departments as a contractor.

[malhar shenoy]

NO u/s 196 of Income tax act 1961.

 

AI Summary

TDS applicability on government payments: deduction generally not required under section 196 for contractor payments. Payments made to State government departments by a payer in the capacity of contractor are not subject to deduction of tax at source u/s 196 of the Income Tax Act, 1961; this answers the specific query on TDS liability for such contractor payments.