Section 194C - TDS on Payment to contractor (as amended by Finance Act 2025)

• Applicability

Any person who is responsible for paying any sum to any resident person for carrying out any work in pursuance of a contract between the contractor and the specified person is required to deduct TDS, if sum paid or credited to contractor exceeds Rs. 30,000 or aggregate of such sum paid or credited during the financial year exceeds Rs. 1,00,000.

• Rate of TDS

If the payee is individual or HUF - 1%

If the payee is a person other than Individual & HUF - 2%

• Time for deducting TDS

At the time of payment or at the time of credit such sum to the account of contractor whichever is earlier.

Note 1 : Individual & HUF are not required to deduct TDS, if such sum is credited or paid exclusively for personal purpose of Individual or member of HUF.

Note 2 : Work shall include Advertising, Broadcasting and telecasting, catering, carriage of goods or passenger by any mode of transport other than railways etc.