What is Section 194C?

Section 194C specifies that any individual liable for paying any amount to a resident contractor for the execution of any work (along with the supply of labour force) pursuant to a contract between both the contractor and the preceding.

  • The Central/State Government
  • Any local authority
  • Any company formed by or according to a Central, State or Provisional Act
  • Any company
  • Any cooperative society
  • Anybody established in India by or under any legislation, committed for either the aim of discussing and meeting housing accommodation or for the sake of the planning, innovation or enhancement of cities, towns and villages or even both.
  • Any company incorporated underneath the Society Registration Act, 1980 or under any of the relevant laws of just about any region of India.
  • Any trust.
  • Any university or that is considered to be a university.
  • Any firm.

Must Read – What is Section 194A?

What is work under Section 194C?

Section 194C

The word ‘work’ in Section 194C means:

  • Advertising
  • Broadcasting and telecasting
  • Carriage of goods and passengers by any means of transport
  • Catering
  • Manufacture or supply of a product according to the request of the customer by means of the content obtained from him/her. That being said, it should not require the manufacture or delivery of a component as per the request of the customer by means of material obtained by a customer besides the customer.

When is Section 194C not applicable?

  • The TDS alluded to in section 194C shall not be subtracted in the preceding circumstances
  • The amount of payment rendered to the contractor in a single contract not exceeding  ₹30,000. If the total amount of these contracts reaches  ₹1,000,000 in the FY, then TDS would be subtracted.
  • When some sum is paid by a party or HUF to the contractor for the execution of the service in the course of personal use.
  • When payment is rendered to a goods transport agency (for folding, recruiting or leasing goods) that holds 10 or fewer carriages at any period mostly during the previous year. In addition, the contractor shall apply any such statement together with the PAN.
  • Where payment is rendered to a non-resident contractor or sub-contractor.