Author: Business So Simple

194C: Payments to contractors.

194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to—

 (i)  one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;

 (ii)  two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family,

of such sum as income-tax on income comprised therein.

(6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, where such contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration to that effect along with his Permanent Account Number, to the person paying or crediting such sum.

(7) The person responsible for paying or crediting any sum to the person referred to in sub-section (6) shall furnish, to the prescribed income-tax authority or the person authorised by it, such particulars, in such form and within such time as may be prescribed.

Format of Declaration Under Section 194C(6) For Non – Deduction of Tax at Source (TDS) to be furnished by the Transporter.. NO TDS in case where such transporter owns ten or less goods carriages at any time during the previous year and furnishes a declaration to such effect, along with PAN.

DECLARATION

I, Name of vehicles owner, Proprietor/ Partner/ Director of M/s Name of the company or firm and address of the company, (hereinafter “The Contractor”) do hereby make the following declaration as required by sub section (6) of section 194C of the Income Tax, 1961 for receiving payments from the payer without deduction of tax deduction at source (TDS).

1. That name of party authorized to make this declaration in the capacity as proprietor/ partner/ Director.

 2. That the contractor is engaged by the payer for hiring or leasing of goods carriage for its business.

 3. That I have not own more than ten goods carriage vehicles as on date.

4. That if the number of goods carriages owned by the contractor exceeds ten at any time during the previous year 2022-23 (01-04-2022 to 31-03-2023), the contractor shall forthwith, in writing intimate the prater of this fact. 5. That the Income Tax permanent account number (PAN) of the contractor is …………………… A photocopy of the same is furnished to the payer along with this declaration.

Place:

Date :                                                                                           Declarant

Download declaration format

Income Tax Department initiated a Search & Seizure action on few groups engaged in the business of gold & diamond jewellery and real estate, on 17.11.2022. The searches were carried out at more than 30 premises spread over Patna, Bhagalpur, Dehri-on-Sone, Lucknow and Delhi.

During the course of the search, large number of incriminating documents and digital evidence demonstrating evasion of income have been found & seized.

In one of groups, engaged in the business of gold & diamond jewellery, analysis of seized evidence reveals that this group has invested its unaccounted income in cash purchase of jewellery, renovation of shops and immovable properties. This group has been found to have introduced unaccounted money of over Rs. 12 crore in its books of account, in the garb of advance from customers. Further, upon physical verification of stock, during the search action, unaccounted stock of more than Rs. 12 crore has been found.

In the case of another group engaged in real estate business, evidences of unaccounted cash transactions in purchase of land, construction of buildings and sale of apartments, have been found and seized. The evidence seized in the case of a prominent land broker has further corroborated the above unaccounted transactions. The quantum of such unaccounted cash transactions is more than Rs. 80 crore. The unaccounted income so earned by the key persons of the group has been invested in acquisition of many immovable properties including large parcels of land.

During the search operation, unaccounted cash and jewellery worth more than Rs. 5 crore have been seized. A total of 14 bank lockers have been put under restraint. So far, the search action has led to detection of unaccounted transactions exceeding Rs. 100 crore.

Further investigations are in progress.

At present, taxpayers are required to furnish their Income-tax Returns in ITR-1 to ITR-7 depending upon the type of person and nature of income. The current ITRs are in the form of designated forms wherein the taxpayer is mandatorily required to go through all the schedules, irrespective of the fact whether that particular schedule is applicable or not, which increases the time taken to file the ITRs.

The proposed draft ITR takes a relook at the return filing system in tandem with international best practices. It proposes to introduce a common ITR by merging all the existing returns of income except ITR-7. However, the current ITR-1 and ITR-4 will continue. This will give an option to such taxpayers to file the return either in the existing form (ITR-1 or ITR-4), or the proposed common ITR, at their convenience. The scheme of the proposed common ITR is as follows:

1.Basic information (comprising parts A to E), Schedule for computation of total income (Schedule TI), Schedule for computation of tax (schedule TTI), Details of bank accounts, and a schedule for the tax payments (schedule TXP) is applicable for all taxpayers.

2.
The ITR is customized for taxpayers with applicable schedules based on certain questions answered by the taxpayers (wizard questions).

3.
The questions have been designed in such a manner and order that if the answer to any question is ‘no’, the other questions linked to this question will not be shown to the taxpayer.

4
Instructions have been added to assist the filing of the return containing the directions regarding the applicable schedules.

5
The proposed ITR has been designed in such a manner that each row contains one distinct value only. This will simplify the return filing process.

6
The utility for the ITR will be rolled out in such a manner that only applicable fields of the schedule will be visible and wherever necessary, the set of fields will appear more than once.


As evident from the above, the taxpayer will be required to answer questions which apply to it and fill the schedules linked to those questions where the answer has been given as ‘yes’. This will increase ease of compliance. Once the common ITR Form is notified, after taking into account the inputs received from stakeholders, the online utility will be released by the Income-tax Department.

The draft common ITR, based on the above scheme, has been uploaded on http://www.incometaxindia.gov.in for inputs from stakeholders and general public https://incometaxindia.gov.in/news/common-itr.pdf. A sample ITR illustrating step by step approach for filing the ITR and two customised sample ITRs for firm and company have also been provided for illustration. The inputs on the draft ITR form may be sent electronically at the email address dirtpl4@nic.in with a copy to dirtpl1@nic.in, latest by 15th December, 2022.