The 60-second version
Section 194C requires TDS on contractor and subcontractor payments — 1% for individual/HUF, 2% for others when thresholds crossed. I deduct on each invoice, deposit, file 26Q.
Contractor TDS triggers on single ₹30k or ₹1L aggregate
Section 194C applies to work contract payments — construction, maintenance, event setup, not professional advice.
1% for individual/HUF contractor, 2% for company/LLP contractor once threshold crossed.
Goods lane: Section 194Q guide.
194C thresholds
| Trigger | Limit | Rate |
|---|---|---|
| Single payment | ₹30,000 | 1% / 2% |
| Aggregate FY | ₹1,00,000 | 1% / 2% |
| Transporter | PAN quoted | Lower / nil |
| Subcontractor | Same rules | Principal deducts |
194C sequence
Classify
Contractor vs professional (194J).
Track aggregate
Per payee FY total.
Deduct
On crossing threshold.
26Q
Quarterly + 16A.
Flow
194C kit
- TAN.
- Contractor PAN.
- Work order.
- Challan.
- 26Q.
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Labour-only
Pure labour supply may fall under different section — consult CA on classification.
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0 of 4 checked
Freelance designer?
Often 194J if professional — not 194C.
Interior contractor?
194C on work contract portion.
GST plus TDS?
Both apply — TDS on base excluding GST if shown separately.
NRI contractor?
Section 195.
No PAN?
Higher rate under 206AA.
194C vs 194Q?
Services/work = 194C; goods purchase = 194Q.
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