TDS deducted on total amount or only o service charge

[yujin kim]

Dear sir

 

We have paid TDS on contractor as below for years.

MANDAY	20,130
OT	4,767
TOTAL	24,897
PF 13.61%	548
PF 12%	483
SUB TOTAL	24,414
Service Charge 10%	2,490
Service tax 10%	249
Edu 3%	7
Payable	27,160
TDS 1%	272
TOTAL	26,889

 

We have deducted TDS on total amount ( which is mandays , over time, service tax all is included)

But contractor worker 's salary is monthly below than 4,500 Rs, so that TDS not applicable.

But we've deducted from total amount, so that TDS is deducted from contractor worker's salaries also.

So, that I think it is unfair.

so my suggestion is like this.

 

MANDAY	20,130
OT	4,767
TOTAL	24,897
PF 13.61%	548
PF 12%	483
SUB TOTAL	24,414
Service Charge 10%	2,490
Service tax 10%	249
Edu 3%	7
Payable	2,490
TDS 1%	25
TOTAL	27,135

 

We deduct TDS only from service charge which is conractor labour's profit.

 

Can you guide us which case is correct ?

and as per rule, which one is the right one..

AI Summary

TDS on contractor payments must be deducted on total amounts including service tax, not only the service charge.
TDS on payments to contractors must be deducted on the gross amount payable, encompassing mandays, overtime and service tax, unless a specific payment is a reimbursement supported by documentary evidence; excluding only the service charge and withholding on that alone is inconsistent with the statutory requirement and risks notice for under-deduction.