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TMI BlogPayments to contractors and sub-contractorsX X X X Extracts X X X X X X X X Extracts X X X X ..... emed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. (3) Where any sum is paid or credited for carrying out any work mentioned in sub-clause (e) of clause (iv) of the Explanation, tax shall be deducted at source- (i) on the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or (ii) on the whole of the invoice value, if the value of material is not mentioned separately in the invoice. (4) No individual or Hindu undivided family shall be liable to deduct income-tax on the sum credited or paid to the account of the contractor where such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family. (5) No deduction shall be made from the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor, if such sum does not exceed 17 [thirty thousand rupees]: Provided that where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year exceeds 20 [ one lakh rupees ] , the person responsible for paying such sums re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e account of the contractor; (ii) goods carriage shall have the meaning assigned to it in the Explanation to sub-section (7) of section 44AE; (iii) contract shall include sub-contract; (iv) work shall include- (a) advertising; (b) broadcasting and telecasting including production of programmes for such broadcasting or telecasting; (c) carriage of goods or passengers by any mode of transport other than by railways; (d) catering; 22 [ (e) manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer or its associate, being a person placed similarly in relation to such customer as is the person placed in relation to the assessee under the provisions contained in clause (b) of sub-section (2) of section 40A, ] 24 [ but does not include (A) manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer or associate of such customer; or (B) any sum referred to in sub-section (1) of section 194J. ]] ********** Notes :- 1. Substituted vide Finance (No.2) Act, 2009, w.e.f. 1-10-2009, before it was Inserted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d family. ] (2) Any person (being a contractor and not being an individual or a Hindu undivided family) responsible for paying any sum to any resident (hereafter in this section referred to as the sub-contractor) in pursuance of a contract with the sub-contractor for carrying out, or for the supply of labour for carrying out, the whole or any part of the work undertaken by the contractor or for supplying whether wholly or partly any labour which the contractor has undertaken to supply shall, at the time of credit of such sum to the account of the sub-contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax on income comprised therein: 3 [ Provided that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the sub-contractor, shall be liable to deduct income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng any sum as aforesaid to the sub-contractor referred to in the second proviso shall furnish to the prescribed income-tax authority or the person authorised by it such particulars as may be prescribed in such form and within such time as may be prescribed; or] (ii) any sum credited or paid before the 1st day of June, 1972; 11 [or] 12 [(iii) any sum credited or paid before the 1st day of June, 1973, in pursuance of a contract between the contractor and a co-operative society or in pursuance of a contract between such contractor and the sub-contractor in relation to any work (including supply of labour for carrying out any work) undertaken by the contractor for the co-operative society.] 13 [Explanation .-For the purposes of clause (i), goods carriage shall have the same meaning as in the Explanation to sub-section (7) of section 44AE.] (4) 14 [***] (5) 15 [***]] ------------------------- 2. Substituted by the Finance Act, 2007, w.e.f. 1-6-2007. Prior to its substitution, sub-section (1), as amended by the Finance Act, 1973, w.e.f. 1-4-1973, Finance Act, 1992, w.e.f. 1-6-1992 and Finance Act, 1995, w.e.f. 1-7-1995, read as under : (1) Any person responsible for paying any sum to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005. 14. Omitted by the Finance Act, 2003, w.e.f. 1-6-2003. Prior to their omission, sub-sections (4) and (5), as amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988, read as under : (4) Where the Assessing Officer is satisfied that the total income of the contractor or the sub-contractor justifies the deduction of income-tax at any lower rate or no deduction of income-tax, as the case may be, the Assessing Officer shall, on an application made by the contractor or the sub-contractor in this behalf, give to him such certificate as may be appropriate. (5) Where any such certificate is given, the person responsible for paying the sum referred to in sub-section (1) or sub-section (2) shall, until such certificate is cancelled by the Assessing Officer, deduct income-tax at the rates specified in such certificate or deduct no tax, as the case may be. 15. Omitted by the Finance Act, 2003, w.e.f. 1-6-2003. Prior to their omission, sub-sections (4) and (5), as amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988, read as under : (4) Where the Assessing Officer is satisfied that the total income of the contractor or the sub-contractor justifies the deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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