9911796707
TMI BlogSection 194C of the Income-tax Act, 1961--Deduction of tax at source from payments made to contractors and sub-contractors--Instructions regardingX X X X Extracts X X X X X X X X Extracts X X X X ..... of labour for carrying out any work) in pursuance of a contract between the contractor and the bodies specified therein shall, at the time of credit of such sum to the account of the contractor, or 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 two per cent. of such sum as income-tax on income comparised therein. The bodies are: (a) the Central Government or any State Government; or (b) any local authority; or (c) any corporation established by or under a Central, State or Provincial Act; or (d) any company; or (e) any co-operative society. 3. Similarly, when a contractor makes payment of a sum to a resident sub-contractor in pursuance of a contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay, within the prescribed time, the sum so deducted to the credit of the Central Government, in the prescribed manner (vide rule 30 of the Income-tax Rules, 1962). In the case of deduction by or on behalf of the Government, the sum has to be paid on the day of the deduction itself. In other cases, normally, the sum has to be paid within one week from the last day of the month in which the deduction is made. If a person fails to deduct tax at source, or, after deducting, fails to pay the tax to the credit of the Government, he shall be liable to action in accordance with the provisions of section 201. Sub-section (1A) of section 201 lays down that such person shall also be liable to pay simple interest at fifteen per cent. per annum of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if any, faced by the tax deductors in obtaining Form No.16B, the Board have allowed the use of the old Form No.16 also for issuing certificates of tax deducted at source, till 31-12-1991. Instructions in this regard have been issued in Board's Circular No.607 [F.No.275/75/91-IT(B)] dated 4th July, 1991 (See [1991] 190 ITR (St.)88). If a person fails to furnish a certificate as required under section 203, he shall be liable to pay by way of penalty under section 272A, a sum which shall not be less than Rs.100 but which may extend to Rs.200 for every day during which the failure continues. (c) According to the provisions of section 203A, it is obligatory for all persons responsible for deducting tax at source to obtain and quote the tax ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ductible at source. 7. These instructions are not exhaustive and are issued only with a view to helping the persons responsible for making deduction of tax at source under section 194C. In case any assistance is required, the Assessing Officer concerned or the local Public Relations Officer of the Income-tax Department may be approached. 8. The contents of this Circular may please be brought to the notice of all concerned. (Sd.) Rajesh Chandra, Under Secretary to the Government of India. Form No. 13C [ See rule 28(2)] Application for a certificate under section 194C(4) of the In come-tax Act, 1961, relating to deduction of income-tax from payments made to contractors and sub-contractors To The Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as the case may be, payment thereof to me. 3. I hereby declare that what is stated in this application is correct. ........................................................... Signature Date................. ........................................................... Address ........................................................ Permanent Account Number SCHEDULE Sl. No. Full name and address of the authority/person with whom the contract was made Date of the contract Nature of the contract Date by which work on the contract would be completed Sums expected to be credited/paid in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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