Yes, friends, how are you?
Great! Friends, the last video stopped in between due to
some technical reasons.
Let's continue it.
We were discussing about 194C.
What was 194C? 194C was nothing.
When you pay someone against a contract and the payment is
more than a specified limit, then you have to deduct TDS.
What was the specified limit?
We have left it.
We will cover it in today's lecture.
How much more than the specified limit, you have to deduct
the TDS of the other party.
What we were discussing till now, we were discussing that
for what purpose we were paying when we had to deduct TDS.
We discussed about catering.
You give catering contract to someone not for personal
purpose.
Personal bills are not covered here in 194C.
Other than personal payments, catering, advertising, and
you pay more than a specified limit, in that case you have
to deduct TDS.
Let's see.
We were discussing about catering.
Let's see on the screen.
We were discussing about advertising.
We were discussing about broadcasting and telecasting.
We were left with an E point.
What does it say?
It says manufacturing a product according to the
requirement of the customer.
You manufacture a product according to the requirement of
the customer.
According to the requirement of the customer.
What is new in this?
If we manufacture a product, for example, I am.
I told you about my export house.
We get the requirement of the customer.
If I have to make a shirt or a jacket,
I need this type of jacket.
If I have to make jeans,
I need this type of jeans.
I need this colour.
I need this type of cloth.
I need this design.
In this world, whoever is manufacturing, if you think
logically, whoever is manufacturing, according to the
requirement of the customer.
I am not manufacturing for the satisfaction of my soul.
I will manufacture according to the customer.
Only then will the customer like my product.
Only then will he buy my product.
What is new in this?
If I am manufacturing, will I get TDS?
There is no logic in this.
What am I saying?
I said, listen to the whole thing.
You have just read one line.
You have asked a doubt in one line.
Sir, how is TDS in manufacturing?
Your question is absolutely right.
But the answer to this you will get in the next line.
Why am I cutting TDS in manufacturing?
What is the need?
What is the technical provision?
Because of which,
I have to cut my TDS in the case of manufacturing.
Read the whole line again.
Manufacturing a product according to the requirement of the
customer by using
What are you using?
By using material purchased from the customer.
This is a very new point.
This is a strong point.
Manufacturing a product according to the requirement of the
customer.
There is no problem here.
Normal manufacturing is going on here.
Manufacturing a product according to the requirement of the
customer.
But what is next?
By using material purchased from the customer.
I have my own export house.
We do export work.
A customer came to me from Saudi Arabia.
He said,
I am the Sheikh of Saudi Arabia.
I wear a white chola from top to bottom.
It is very hot there.
Temperature is 70-80-60 degrees.
It is very difficult in summer.
I said, what can I do for you?
He said, the white chola that we wear, you make it.
I said, okay.
We will buy the cloth from
Noida.
He said, no sir.
I will give you my own cloth.
Our cloth is very comfortable and light.
We feel less hot in that cloth.
If you buy material from India,
the material of India may be a little hot.
The material we get in Saudi Arabia feels less hot.
Is it possible?
You are the Sheikh of Saudi Arabia.
You are a big customer.
Customer is the king.
He said, okay.
What do you want?
He said, we want that we will supply the cloth to you.
You don't have to do anything.
You have to do the designing, manufacturing and tailoring
so that we can wear it.
You are the manufacturer.
The designing and assembling of the cloth and tailoring is
done by you.
We will supply the cloth from Saudi Arabia to you.
We will supply the cloth to you.
You don't have to worry about the cloth.
We will supply the cloth to you.
You don't have to buy the cloth from outside.
You just have to work on the cloth.
You have to understand this as an example.
You can understand the second example.
The second example is that you might have seen handbags.
There are handbags of cloth.
It is written on it,
Pataka Bidi.
Have you ever seen a handbag like this?
Sir, what kind of example are you giving today?
Friend, I give such an example so that it fits in the mind.
I can also give an example of decency.
But by giving an example of decency, things get out of the
mind.
I will give such an example, things will fit in the mind.
It is written on the handbag, 555 Pataka Bidi.
For example, I am the owner of 555 Pataka Bidi.
I have to make that bag.
I went to the bag maker.
I said, sir, I have to make 1000 bags.
He said, okay.
He said, I have to make the bag, but the material of the
bag,
I don't trust you on what kind of material you use.
I don't trust you.
It is possible that you use a cheap material.
So I will buy the material for you.
The cloth used in the bag,
I will give you that cloth.
You just have to manufacture it and make a proper bag.
And we have to put our logo on it.
In this case, the factory guy, what is he doing?
He is just taking the cloth from me and making the bag.
He took the cloth from me and made the bag.
What am I doing?
I am supplying the cloth to him to make the bag.
Who am I? I am his customer.
The customer is supplying the material to him.
This is the point.
Now read it again.
Manufacturing a product, according to the requirement of
the customer.
He is manufacturing the bag according to my requirement.
Who am I? 555 Pataka Beedi.
By using the material purchased from the owner of 555
Pataka Beedi.
He is purchasing from me and manufacturing things.
In that case, how will TDS be provided?
Look at this.
Material purchased from the customer or his associate being
a related person.
In that case, manufacturing will be a job work contract.
This will be a job work contract.
When I will pay that guy,
my cloth, he is just manufacturing it.
When he will supply the bags after manufacturing,
I will pay him.
What will I do?
I will deduct TDS and pay him.
In this case, this is not a contract for sale of goods.
Let's understand this.
This is not a contract for sale of goods.
This is a job work contract.
I am giving him goods.
I am supplying the raw material.
What is a contract for sale of goods?
For example, you go to the market.
You like a pair of jeans.
You buy a pair of jeans.
This is a sale of goods.
You have paid him.
You have bought a finished product.
You have bought a pair of jeans.
This is a sale of goods.
But what is a job work contract?
First, I supply the raw material.
The other person manufactures the finished goods from the
raw material.
Then he sells the finished goods to me.
In this case, this is not a contract for sale of goods.
This is a job work contract.
In this case, job work provisions are applied.
My 194C will be applied in this case.
There were 5 such purposes.
There were 5 such purposes where 194C is applicable.
Let's see again.
Advertising.
I gave you the example of MDH.
Telecasting.
Including the production of programs.
Carriage of goods or passengers.
any mode other than railways catering manufacturing a
product according to the requirement of the customer
Job work example
Job work example is also covered here
These are 5 purposes definition of work definition of work
that I get a person to do a work and I pay him against the
work then my 194c will be applicable whatever payment I
give him whatever payment I give him from that I have to
deduct TDS and have to pay him ok sir
I understand the purpose but tell me at what rate I have to
deduct TDS you didn't tell me that at what rate I have to
deduct TDS come here sir see, rate of TDS if you pay the
contractor it remains 1% if the contractor is individual or
HUF the manufacturer in front for example, I was 555 Ptk BD
and the manufacturer in front who used to make bags who
used to make bags if he was an individual HUF then in that
case if I would have paid him 1 lakh or 1 crore then 1% TDS
I would have deducted and paid him is the point clear? but
sir, if he was a company apart from individual if there was
another firm apart from individual what would have happened
in that case? in that case
TDS rate remains 2% 2% in respect of other pays individual
HUF contractor 1% other than individual 2% 2% rate ok sir
you told me 2% rate and 1% rate very good, but sir you are
forgetting one thing what am I forgetting? will someone
tell me? sir, you are forgetting one thing that you didn't
tell me the limit till now all the provisions of TDS you
have given a limit that if you pay above this limit then
TDS will be applied on you you have to deduct on this rate
ok, you told me the rate of 1% 2%
good, you told me the rate but what is the amount of
payment? suppose suppose if I get a bill of Rs.100 will I
deduct TDS on Rs.100? or if I get a bill of Rs.500, will I
deduct TDS on Rs.500? what is the limit? there must be some
monetary limit also sir, come, let me tell you the limit
the limit in this case is if there is a single bill of
Rs.30,000 if there is a single bill of Rs.30,000 single
bill is worth up to Rs.30,000 single bill is worth up to
Rs.30,000 in that case you don't have to
any TDS single bill is worth up to Rs.30,000 single bill is
worth up to Rs.30,000 you don't have to deduct any TDS if
you go above that you will deduct all your TDS this is also
possible if there is a single bill of Rs.30,000 there is no
TDS if there is a billing of Rs.25,000, Rs.27,000,
Rs.28,000 if there is a billing of Rs.25,000, Rs.27,000,
Rs.28,000 in that case, you won't get any TDS in that case,
you won't get any TDS and there is a total limit and there
is a total limit it is also
if you have a billing of Rs.1 lakh and you have asked it to
be up to Rs.30,000 and you have asked it to be up to
Rs.30,000 and if there is billing up to Rs.30,000 then
there is no requirement to cut TDS its loopholes are also
possible if you have a billing of Rs.1 lakh and the billing
of Rs.25,000 and the billing of Rs.25,000
Rs.25,000 and the opposing party will ask you not to cut
TDS and the opposing party will ask you not to cut TDS
illegally, that there is no need to deduct TDS.
So, I will think about it.
I will think that up to Rs.
30,000, up to the billing of Rs.
30,000, there is no TDS.
So, why not I cut it into 5 pieces of Rs. 25,000.
This is Rs.
25,000, this is Rs.
25,000, and the next one is also Rs.
There is a payment of Rs. 1.25 lakhs.
So, let's do this to the payment of Rs. 1.25 lakhs.
Let's break it into 5 payments of Rs. 25,000.
There is a payment of Rs. 1.25 lakhs.
So, let's break it into 5 payments of Rs. 25,000.
What will happen with that?
What will happen with that is that no bill has exceeded Rs.
30,000.
I will tell the other person that you have raised 5 bills
for Rs. 25,000.
Has any single bill been raised for more than Rs.
No.
So, is there a requirement to deduct TDS?
No, sir.
Mr. Gupta, you are very cunning.
You have made me sell TDS.
You are talking about a bill of Rs. 30,000.
There is no TDS on a single bill of Rs. 30,000.
There was a bill of Rs. 1.25 lakhs.
You made me break it into 5 bills.
Sir, you have done a very good job.
Wow, sir. I have accepted you.
But friends, you are praising me.
It is a good thing that you are praising me.
It is a good thing that our happiness did not last for long.
It did not last for long.
Because what we are talking about at this time, on a real
basis,
Nirmala madam is also listening to this.
Finance Minister madam is also listening to this.
And Finance Minister madam said, this is the right thing to
do.
It is also possible that people will have big amounts, big
bills.
So, we will break it.
We will break it and do something that the amount will be
less than Rs.
No TDS will have to be cut.
So, in that case, Babu Mushai, the government said, they
are very cunning.
CA people are very cunning.
They use a lot of brains.
They save tax in everything.
Let's do one thing.
There is a limit of Rs. 30,000.
Put one more limit.
If there is a payment of a single bill of Rs.
30,000, then a total, if you pay one person in the entire
year, above Rs.
25,000, then your TDS will be cut.
Here, you are paying Rs. 1.25 lakhs to one person.
The government said, limit it to Rs.
1 lakh.
That is fine.
You are paying Rs. 25,000.
Here, no TDS will be cut.
Because the bill is less than Rs. 30,000.
But here, here the government said, if you give one person
Rs.
1 lakh,
Rs. 1 lakh,
Rs. 1 lakh to a single person, if you pay a single person
more than Rs.
1 lakh, in the entire year, then TDS will be applied there.
Friends, our planning, our thinking, our finding loopholes,
everything is in vain.
The palace of cards, the way it is piled up, our planning
too, the government has piled it up in the same way.
We were thinking that we will pay Rs. 25,000 for 5 bills.
No TDS will be applied.
But what did the government say?
The government said, if you, in the entire year, this Rs.
30,000 bill is there, if the single bill is more than Rs.
30,000, then TDS has to be cut.
Even if it is not cut, if you are paying one person more
than Rs.
1 lakh, in the entire year, there too, the provisions of
TDS will be applicable to you, my dear.
So, there are two limits in this case.
In 194C, there are always two limits.
One is Rs.
30,000, the other is Rs.
1 lakh.
But the single bill payment is Rs.
30,000, and Rs.
1 lakh is the payment for the entire year.
Come, read it once for formality.
What does it say?
No deduction will be required to be made if the
consideration for the contract does not exceed Rs.
But, however, to prevent the practice of the contract being
split up into contracts valued at less than Rs.
30,000, to avoid tax deduction, it has been provided that
tax will be deducted where the amount credited or paid
exceeds Rs.
30,000 in the case of single payment and Rs.
1 lakh aggregate during the financial year.
Is the point clear?
Any fear?
Any complaint?
Any problem?
We were discussing about 194C.
What is the limit?
Rs. 30,000 for single payment,
Rs. 1 lakh for the entire year.
What are the rates? 1%, 2%.
194C means the contractor's payment.
A contract's recording, a job's recording, a work's
recording you are paying.
And what is being covered in the definition of work?
In the definition of work, all these things are being
covered.
Catering, manufacturing, do you do all these things?
For anyone?
So whatever payment you get,
TDS will be deducted.
These are all the points.
There are some provisions when TDS is not applied on you.
These are for goods carriage workers.
Goods carriage workers work hard, drive trucks day and
night, carry goods from one place to another, are involved
in transportation activities.
Most of the work is done in cash.
Payments for tolls, food at dhabas, most of the work is
done in cash.
Transport industry is a very big industry of our country.
Government never upsets these people.
These tax provisions, this person sitting in the office in
the AC room, he can easily follow it.
In summer, in 45-50 degrees, he is driving a truck.
Will he see TDS provisions or will he drive a truck?
Sir, the government has given exemption to this person.
In order to convey, it has been clarified that this
relaxation of TDS, it shall only be applicable to the
payment in the nature of transport charges, whether paid by
a person engaged in the business of transport or otherwise.
Made to a contractor, now who is that person, whom are you
paying?
You are paying such a person who owns 10 or less good
carriages at any time during the previous year.
Throughout the year, he does not have more than 10 cars,
more than 10 trucks, he does not have a truck.
If you pay such a person, then you do not have to pay TDS
on him.
Do not trouble him. He is already troubled.
One truck has run out of CNG, the other has run out of
diesel.
The third truck has run out of a tyre.
He is troubled.
In this case, the government has said that there is such a
truck driver, such a good carriage driver, who has a
maximum of 10 trucks.
He has a maximum of 10 trucks throughout the year.
He does not exceed more than that.
He drives his truck, whether he drives it on lease or on
normal flying hiring.
And he has furnished his PAN card, his PAN number to his
client.
In that case, you do not have any right to deduct TDS from
that person.
You will not deduct any TDS from that person in that case.
Only condition is that he does not exceed more than 10
trucks and furnishes his PAN number.
Sir, this was MotaMoti194C.
Let's see his question.
Let's wind it up.
There is nothing in it.
This is a limit question.
This is the same question that we discussed a point worth
1.25 lakhs.
He says that ABC is limited.
He has made some payments to Mr. X contractor.
Now he is talking about Mr. X.
Why did he tell us his name?
Why is he telling us his name?
Did we ask him his name?
Why is he telling us his name, Mr.
He is telling us his name so that we can judge whether Mr.
X is an individual HUF or other than individual HUF.
If he is an individual HUF, then we will deduct his TDS by
1%.
If he is an other than individual HUF, then we will deduct
his TDS by 2%.
ABC is limited.
Mr. X makes payments to an individual.
So, TDS will be deducted by 1%.
Let's see what the payments are.
The first payment is of Rs. 20,000.
What did I tell you?
Single bill is up to Rs. 30,000.
Single bill is of Rs. 30,000.
So, there is no TDS.
Is there any requirement to deduct TDS in the first payment?
No.
Next.
It is of Rs. 25,000.
It is a bill of Rs. 25,000.
Is there any requirement to deduct TDS in that case?
No.
Because the payment is below Rs. 30,000.
Next.
It is of Rs. 28,000.
Is there any requirement to deduct TDS in this case?
Not yet.
As soon as it exceeds Rs. 30,000, it will be deducted.
Now, look.
One Mars says that the payment of Rs. 30,000 is due on
account of contract work.
On what basis are we deducting TDS in 194C?
At the time of credit or at the time of payment, whichever
is earlier.
What does credit mean?
When the payment is due.
In this case, we have already given three payments to Mr. X.
We have already given three payments to Mr. X.
In which there was no TDS.
Now, calculate the total.
Rs. 20,000, Rs. 25,000, Rs. 45,000.
Rs. 45,000 and Rs. 28,000.
We have already made payments of Rs. 73,000.
It is a payment of Rs. 73,000.
No TDS has been deducted yet.
Why not?
Because the bills were below Rs. 30,000.
The last payment is of Rs. 30,000.
And as soon as I club the payment of Rs. 30,000 in the
payment of Rs. 73,000.
What will be the total payment in the whole year?
Rs. 1,03,000
After hearing Rs. 1,03,000, the ears of the finance
minister will stand up.
They will say that you have made a payment of more than Rs.
1,00,000.
Now, you will have to deduct the TDS.
You will have to deposit the balance of TDS.
You will have to file the return of TDS.
Sir, in this case, the total payment of Rs. 1,03,000 will
be made in the whole year.
You will have to deduct the TDS of 1%.
When do you have to deduct it?
From which payment?
From the last payment.
I have already made three payments.
How will I deduct it from that?
I have already received the money.
I have deposited it in my bank account.
How will I deduct it from that?
The payment that I have to make now,
I will deduct the TDS from the payment that I have to make.
The money that I have to pay now,
I will deduct the TDS from that.
Out of Rs.
30,000, 1% of TDS will be deducted.
Whose 1%?
Of Rs. 1,03,000.
Let's see the answer.
This is the answer.
Out of Rs.
30,000, 1% of Rs.
1,03,000 will be deducted.
Sir, this was our 194C.
What were the rates? 1% and 2%.
What was the limit?
Rs. 30,000 and Rs. 1,00,000.
Whose payments were there?
There were 5-6 payments.
Like advertising payment, catering payment.
Do remember that it is a personal payment.
If it is a personal payment, then it will not be covered in
194C.
It is a personal payment.
You get married at home.
In that case, you call the caterer.
You call the cook.
You pay him.
Let's say you paid Rs. 50,000.
In that case, your TDS liability will not be there.
You don't have to deduct TDS from personal payments.
If it is an official payment, business and purpose,
business and profession's purpose payment, in that case,
you will have to deduct your TDS.
This was 194C for you.
I hope this point will be clear to you.
We will meet in the next lecture with a new section.
Till then, goodbye.
Good night. Thank you very much.