Alfa Pvt. Ltd., an Indian Company, has made payments to Beeta Enterprises, a resident partnership firm on different dates during the year 2018-19 towards the job work done by them under different contracts: Contract No.

Applicability of TDS provisions u/s 194C of the Income tax Act, 1961 As per section 194C(5) of the Income-tax Act, 1961, tax has to be deducted at source where the amount credited or paid or likely to be credited or paid to a contractor or sub-contractor exceeds ₹ 30,000 in a single payment or ₹ 1,00,000 in aggregate during the financial year. Therefore, in the given case, even-though the value of each individual contract does not exceed ₹ 30,000 but the aggregate amount exceeds ₹ 1,00,000. Hence, contention of Alfa Ltd. is not correct and tax is required to be deducted at source under section 194C @ 2% on the whole amount of ₹ 1,07,500/- from the payment of ₹ 18,000 towards Contract No. 5 on account of which the aggregate amount exceeded ₹ 1,00,000. However, no tax deduction is required to be made if the value of the last contract i.e. contract no. 5 is ₹ 10,000 as the aggregate amount in such case would be ₹ 99,500 which is below the aggregate threshold monetary limit of ₹ 1,00,000.