What is Section 194C of Income Tax Act?

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Section 194C of Income tax Act

1. What is Section 194C of Income Tax Act?

Section 194C basically states that any person who is responsible for paying any amount to the resident contractor for any work to be carry out (which includes supply of labor), in fulfillment of a contract between the contractor and the following.

Any local authority or any corporation established by or under a Central, State or Provisional Act. The Central Government or any State Government. A any company or Any co-operative society or Any trust or Any university or deemed university or Any firm. or Any authority which is established in India by or under any law, involved either for the determination of trade with and sufficient the needs for housing accommodation or for the purpose of preparation, progress or improvement of cities, towns and villages. or any society which is registered under the Society Registration Act, 1980 or any such corresponding law to the Act.

  1. What is meaning of work for Section 194C of Income Tax Act?

The mainly, “work” in this section would be include-

  1. Advertising
  2. Mode of transportation for Carriage of passengers and goods or other than railways
  3. Telecasting and Broadcasting including production of programs for such a telecasting or broadcasting
  4. Catering
  5. Supplying and Manufacturing of a product accord to the specification given or as per the requirement of a customer.

  1. What is a Sub-Contractor as per Income tax Section 194C?

Basically, A “sub-contractor” mean any person who enters into a contract with the contractor for carrying out, or for the supply of labor for carrying out the whole or part of the work undertaken by the contractor under a contract with any of the authorities or for the supply of, whether wholly or partly, any labor which the contractor has undertaken to supply in terms of his contract with any of the authorities mentioned under section.

  1. What is TDS on Sub-Contractor?

Under the provision of Income Tax Act, any person who being a contractor and being not an individual or from a Hindu Undivided Family.  Who is responsible for paying any sum to a resident. In fulfillment of a contract with sub-contractor for a carrying out, or for carrying and supply of labor carrying out.

However, the whole or part of the work which is undertaken by a contractor or supplying partly or wholly any labor which a contractor had undertaken to supply. In addition, at the time of credit for such sum to the account. Lastly, The sub-contractor or the time of payment. Payment by the issue of cheque or a draft or by other mode, whichever is earlier. Deduction amount equal to 1 % of sum as income-tax.

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