Section 194C of the Income-tax Act, 1961--Deduction of tax at source from payment made to contractors and sub-contractors--Instruction regarding

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.... any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and the bodies specified therein shall, at the time of credit of such sum to the account of the contractor or payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to 2% of such sum as income-tax on income comprised therein. The bodie are:   (a) the Central Government or any State Government, or   (b) any local authority, or   (c) any corporation established by or under a Central, State or Provincial Act; or   (d) any company; or   (e) any co-operative society, or   (f) any authority, constituted in India by or ....

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.... that the total income of a contractor or a sub-contractor justifies the deduction of income-tax at a lower rate or no deduction of income-tax, the Assessing Officer can give to him such certificate as may be appropriate. For this, an application has to be made to the Assessing Officer in Form No.13C. During the validity of this certificate, deduction of tax at source will be made in accordance with the direction given in the certificate. 6. The responsibilities, obligations, etc., under the Income-tax Act, of the persons deducting tax at source under section 194C are briefly as follows: (a) According to the provisions of section 200, any person deducting any sum in accordance with the provisions of section 194C is required to pay, wi....

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....ax at source is required to furnish a certificate to the effect that tax has been deducted and to specify therein the amount so deducted and certain other particulars. The certificate has to be furnished in Form No.16B within the prescribed period of one month and fourteen days to the person to whose account credit is given or to whom payment is made, by any mode, as the case may be. Form No.16B is printed by the Central Government and can be procured from the Income-tax Department on payment of a nominal consideration. If a person fails to furnish a certificate as required under section 203, he shall be liable to pay by way of penalty under section 272A, a sum which shall not be less than Rs.100 but which may extend to Rs.200 for every day....