TDS & TCS Compliance for Contractors
If you're a contractor, transporter, or supplier in Singrauli, understanding TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) is crucial. This guide covers everything you need.
When is TDS Applicable?
| Payment Type | Section | Threshold | TDS Rate |
|---|---|---|---|
| Contractor Payments | 194C | > ₹30,000 (single) / ₹1 lakh (year) | 1% (individual) / 2% (company) |
| Professional Fees | 194J | > ₹30,000 p.a. | 10% |
| Rent | 194I | > ₹2.4 lakh p.a. | 10% (land/building) / 2% (P&M) |
| Commission | 194H | > ₹15,000 p.a. | 5% |
| Interest (other than bank) | 194A | > ₹5,000 p.a. | 10% |
TDS on Contractors (Section 194C)
This is most relevant for Singrauli businesses dealing with NCL, NTPC, or sub-contracting.
Who Must Deduct:
- Government bodies
- Companies
- Partnership firms
- Individuals/HUF with audit requirement (turnover > ₹1 Cr business / ₹50 L profession)
Rates:
| Deductee | Rate (with PAN) | Rate (without PAN) |
|---|---|---|
| Individual/HUF | 1% | 20% |
| Others (Company, Firm) | 2% | 20% |
TCS (Tax Collected at Source)
206C(1H) - TCS on Sale of Goods
If your sales exceed ₹50 lakh to a single buyer in a year:- Collect 0.1% TCS on amount exceeding ₹50 lakh
- Report in TCS return
When TCS Applies:
| Category | Rate |
|---|---|
| Sale of goods > ₹50 L | 0.1% |
| Scrap sales | 1% |
| Minerals (coal, lignite, iron) | 1% |
| Timber | 2.5% |
| Motor vehicles > ₹10 L | 1% |
TDS/TCS Due Dates
| Month of Deduction | Deposit Date | Return Filing |
|---|---|---|
| April - February | 7th of next month | Quarterly |
| March | 30th April | 31st May |
TDS Return Due Dates:
| Quarter | Due Date |
|---|---|
| Q1 (Apr-Jun) | 31st July |
| Q2 (Jul-Sep) | 31st October |
| Q3 (Oct-Dec) | 31st January |
| Q4 (Jan-Mar) | 31st May |
Configuring TDS in Tally
Step 1: Enable TDS
- Gateway > F11 > Statutory & Taxation
- Enable TDS: Yes
- Enter TAN
Step 2: Create TDS Ledgers
- Create ledger under "Duties & Taxes"
- Select Nature of Payment (e.g., 194C)
- Set rate
Step 3: Configure Party Ledger
- Set "Is TDS Deductible: Yes"
- Enter PAN
- Select deductee type
Step 4: Voucher Entry
- Create Payment/Journal
- Tally auto-calculates TDS
- TDS appears as separate entry
Generating TDS Returns from Tally
TallyPrime can generate e-TDS returns directly:
Common TDS Mistakes
| Mistake | Consequence | Solution |
|---|---|---|
| Late deposit | Interest @ 1.5%/month | Set reminders |
| Wrong PAN | 20% TDS rate | Verify PAN before payment |
| No TDS | Disallowance of expense | Deduct before payment |
| Late return | ₹200/day penalty | File on time |
| Wrong section | Mismatch in Form 26AS | Use correct section |
Penalties
| Default | Penalty |
|---|---|
| Non-deduction | Amount equal to TDS not deducted |
| Late deduction | Interest @ 1% per month |
| Late deposit | Interest @ 1.5% per month |
| Late return filing | ₹200 per day (max: TDS amount) |
| No return | ₹10,000 to ₹1,00,000 |
HCS TDS/TCS Services
Stay TDS compliant with HCS!