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TDS on Work Contract - Income Tax

#1 Issue Id: - 3792
Dated: 8-2-2012
By:- sunil kumar valipireddy kondannagari
TDS on Work Contract

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Hi All,

We have assigned a work contract to the main contractor who will take care about compleation of the turnkey project. The total project cost bifurcated as "material & labour" and "co-ordination fee".  In this scenario, what is the cost on which TDS 2% is to be deducted, is it on "material & labour" or only on "labour".  Aslo what would be the cost on which WCT is to be deducted by us.

Thank You

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#2 Dated: 10-2-2012

WCT TDS as applicable in the project state to be deducted from the total sales price , i.e.invoice value including material,labour,co-ordination fee etc,.

Yours being a turnkey lumsum indivisible contract,WCT shall be applicable on the gross total project value.

Incase the whole contract would have been awarded as a split contract , i.e.separate contract for supply,labour and co-ordination,WCT would not have been attracted , thus no WCT TDS.

Hope,I have adequately clarified , may revert for any further clf.


Prasanta Khatai,


#3 Dated: 10-2-2012
By:- sunil kumar valipireddy kondannagari

Thanks for your clarification on WCTDS.

But also wanted TDS as per Income Tax Act.

We are deducting TDS @ 10% on Co-Ordination Fee.

But my doubt is whether 2% TDS to be deducted on Labout as well Material or only labour ?


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