Section 194C states that any person responsible for paying any sum to the resident contractor or subcontractor for carrying out any work is required to deduct TDS under section 194C.
Here work would include:
Advertising
Broadcasting and telecasting including production of programs for such broadcasting or telecasting
Carriage of goods and passengers by any mode of transportation, other than railways
Catering
Manufacturing or supplying of a product according to the requirement or specification of a customer by using the materials purchased from such customer or its associate as defined in section 40A(2), But, does not include manufacturing or supplying of a product according to the requirements or specifications of a customer by using the materials purchased from a person, other than such a customer.
No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages who owns ten or less goods carriages at any time during the previous year, on furnishing of his PAN along with declaration to this effect, to the person paying or crediting such amount.
TDS shall be deducted when amount of single transaction exceed ₹ 30,000 or amount exceed ₹ 1,00,000 in aggregate during the Financial Year.
Payment / Credit to resident individual or HUF-1%
Payment/Credit to any resident person other than individual / HUF- 2%
- No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages who owns ten or less goods carriages at any time during the previous year, on furnishing of his PAN along with declaration to this effect, to the person paying or crediting such amount.