Amendments in section 194C through Finance Act (2), 2009

As per amendment through Finance Act(2) ,2009,new Section 194C has been substituted for old section 194C .New Section is applicable from the 01.10.2009.The main changes in the new section is given as under:

  1. Separate rates for contractor and subcontractor has been removed. Now the tax rate has been categorized according the status of deductee and new TDS rates for contractors  are as under:

 For payment made to Individual &  Hindu undivided family=1 %

 payment to others =2%

  1. Concessional rate of 1 % for advertisement Contracts has been removed and now rates as defined under (1) above is applicable on all type of contractor including Advertisement contracts.
  2. No TDS on payment to transport operator (i.e. in the business of playing, hiring or leasing goods carriage), if he/it furnishes his PAN to payer.
  3. No surcharge and cess applicable on basic TDS rate in FY 2009-10 on payments made to resident except salary
  4. Basic limit of 20000 and 50000 per annum remains unchanged.
  5. No tds in case of payment of Job work, if raw material has not been supplied by the payer.


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