applicability of tds

[Guest]

sir

we have purchased two lakh sms for issuing in bulk from a company through quotation at a cost of Rs.31,500.00.

i would like to know whethere it attracts TDS under 194 C of income tax.

with regards,

chakravarthy s n

[RAM BANSAL]

Dear Sir ,

 In accordance with the provisons of section 194C , any person responsible for paying any sum to any residentcontracotr for carrying out any work (includinf supply of labour for carrying out any work ) under  a contract in pursuance of  a contrat between contractor and pesons specified in explanation to section 194C , shall deduct income tax at the time of such payment thereof . Hence for the application of section 194C there should be a contract for carrying out any work . The provisions of section 194C are not applicabel on the purhcases . In tis case the quariest has made the purchases of Buld SMS . It is not a contract for carrying out any work . Hence no TDS is required to be deducted u/s  194C.

[RAM BANSAL]

Dear Sir,

As per the provision of section 194C any person responsible for paying any sum to any resident contractor

for carrying out any work (including spply of labour) under a contract  in pursuance to a contract between contractor and the person specified under explanation to section 194C , shall dedcut tax at source at the time of such payment thereof -----. Hence  there must be a contract between the parties for the carrying out any work inculding supply of labour . In the case of the quariest  has purchased the goods . Hence provisions of section 194C are not applicable

AI Summary

TDS under contractor-withholding rules: purchase of bulk SMS treated as goods, so withholding obligation does not arise. Withholding tax applies only where payment is made under a contract for carrying out work or supply of labour by a resident contractor; a purchase of goods (here, bulk SMS acquired by quotation) does not amount to such a contract, and therefore the contractor-withholding obligation does not arise.