Understanding TDS Section 194
If you are a business owner in India, it is important to understand the tax deduction at source (TDS) provisions of the Income Tax Act, 1961. TDS is a mechanism for the government to collect taxes from individuals and businesses at the source of income. In this article, we will focus on TDS 194 and explain what it is, how it works, and how SDBA & Co. can help you stay compliant.
What is TDS Section 194?
TDS 194 is a section of the Income Tax Act, 1961, that deals with the deduction of tax at source from payments made to contractors or sub-contractors for carrying out any work, including supply of labour, by the principal contractor. Under this section, the principal contractor is required to deduct TDS at the prescribed rate before making any payment to the contractor or sub-contractor.
How does TDS section 194 work?
TDS 194 works by requiring the principal contractor to deduct tax at source from payments made to the contractor or sub-contractor for carrying out any work, including supply of labour. The rate of TDS is 1% for payments made to an individual or a Hindu undivided family (HUF), and 2% for payments made to any other person. The TDS deducted under section 194 is required to be deposited with the government by the 7th of the following month in which the deduction is made. The principal contractor is also required to issue a TDS certificate in Form 16A to the contractor or sub-contractor within 15 days from the due date for furnishing the TDS return.
How can SDBA & Co. help?
At SDBA & Co., we understand the complexities of the TDS provisions of the Income Tax Act, 1961, and we can help you stay compliant with TDS 194. Our services include: Compliance reviews - We can review your business operations to ensure that you are complying with TDS 194 and other TDS provisions. Advice and planning - We can provide you with advice on how to structure your business operations to minimize your tax liabilities and ensure compliance with TDS 194. Representation - We can represent you in dealings with the Income Tax Department if you are subject to an audit or investigation related to TDS 194 or other TDS provisions. In addition to our TDS services, we also provide a range of other accounting and business advisory services to help you manage and grow your business. Conclusion TDS 194 is an important provision of the Income Tax Act, 1961, that affects many businesses in India. At SDBA & Co., we understand the complexities of TDS provisions and can help you stay compliant and minimize your tax liabilities. Contact us today to learn more about how we can help you manage and grow your business.
