Shifting of liability of tax, Income Tax

[T.SUNDARAM]

The main contractor has claimed the tds and reported the turnover and paid the tax on the works given to a registered sub contractor. The Sub contractor has claime d exemption showing that the main contractor has paid the tax. Can the tax liablitiy can be shifted to main contractor from sub contractor

Posts / Replies

[CA Dev Kumar kothari]

Main contractor may be is liable to make TDS from payments to sub-contractor if the conditions of S. 194C apply. Income of contractor and sub-contractor are assessable separately. The liability of income tax cannot be shifted to contractor. Sub contractor is liable to pay tax on his income. however, sub-contractor may apply to his A.O. for TDS at nil or lower rate.

[T.SUNDARAM]

In continuation of my query , it is to be added that the issue is under SALES TAX LAWS and not Income Tax Act