TDS on catering services is required to be deducted under Section 194C of Income Tax Act 1961 at the rate of 1% or 2% (as the case may be) for payments to residents.

Is TDS applicable for food?

Question 11 : Whether a contract for catering would include serving food in a restaurant/sale of eatables? Answer : TDS is not required to be made when payment is made for serving food in a restaurant in the normal course of running of the restaurant/cafe.

When TDS is required to be deducted?

When should TDS be deducted and by whom? Any person making specified payments mentioned under the Income Tax Act are required to deduct TDS at the time of making such specified payment. But no TDS has to deducted if the person making the payment is an individual or HUF whose books are not required to be audited.

What is required for deducting TDS on payment to parties?

From September 1, 2019, an individual or HUF paying any sum to a contractor or a professional or commission or brokerage more than Rs 50 lakh in a financial year would be required to deduct tax at source (TDS) at the time of credit of such sum or at the time of payment of such sum; whichever is earlier.

Is TDS deductible on canteen expenses?

The canteen has been outsourced to a catering contractor. The contractor raises two separate bills every month One bill for supply of food and another bill towards labour charges. The company deducts TDS only from the labour bill. TDS is not deducted from the food supply bill.

Step by Step Guide to How To Rectify TDS Defaults / Correction Statement (in English)

What if TDS is not deducted?

Penalty for companies for not depositing or not deducting TDS on time. The employer can make the interest payment on such late payment of TDS before filing TDS returns or demand raised by TRACES. Also, the interest paid delay while depositing TDS is not allowed as an expense under the income tax provisions.

Who is exempt from deducting TDS?

The TDS rate has to be taken as per the relevant section provided in the Income Tax Act, 1961. TDS is exempted in the following 2 cases: If the receiver gives a self-declaration saying that he had made the required investments in FORM 15G/15H or. There is a certificate of exemption given by the Assessing Officer.

What is the rule for TDS deduction?

If you have not filed your income tax returns for the last two years, and the total on your tax deductions exceeds Rs 50,000 or more in each of the preceding two years, you will be subject to a higher TDS. Now, this higher TDS can mean two things- either double the specified TDS rate or 5 percent, whichever is higher.

Who is liable to TDS?

The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government.

How can I check my TDS deduction?

1. Step 1: Go to
2. Step 2: Register and Login to the portal.
3. Step 3: Go to 'My Account' tab and click on view Form 26AS (Tax Credit)
4. Step 4: Select year and PDF format to download the file and proceed further.
5. Step 5: Open the downloaded file.

Can TDS be refunded?

Tax Deducted at Source (TDS) is the sum that is deducted from a taxpayer's income like salary, interest from bank accounts, rent etc. If the TDS collected is more than what you owe to the government, you can get a TDS Refund.

Is TDS applicable on lunch?

4 Answers. Dear Bijesh Ji, If the payment is being made by the company (for supply services not purchase of lunch) - TDS should be deducted as per Section 194C @1% if the payee is Individual/ HUF or @2% in any other case.

What is the rate of TDS deduction in case of advertising expenses in case of an individual?

The deduction is required to be made at the rate of 1 per cent. When an advertising agency makes payments to their models, artists, photographers, etc., the tax shall be deducted at the rate of 5 per cent as applicable to fees for professional and technical services under section 194J of the Act.

What is TDS 194C?

Section 194C Explained

According to the Section 194C of the Income Tax Act, any individual making a fee to a residential individual, who carries out 'work' as a contract between the 'specified individual' and the 'resident contractor,' is obliged and required to deduct TDS (Tax Deducted At Source).

How can I reduce my TDS deduction?

An application for Nil/ Lower deduction of TDS is required to be filed in Form 13 to the Income Tax Officer, and the tax officer on being satisfied that lower deduction of TDS is justified shall issue a certificate for the same under Section 197.

On which items TDS should be deducted?

• Salaries.
• Interest payments by banks.
• Commission payments.
• Rent payments.
• Consultation fees.
• Professional fees.

Is Form 16 mandatory if TDS not deducted?

The employer or the entity that deducts your Tax Deducted at Source (TDS) is legally bound to issue Form 16 by May 31. Employees with an income of less than Rs. 2,50,000 for the Financial Year, are exempted from income tax. Hence, if no tax has been deducted, Form 16 will not be issued to them.

How can I get TDS refund?

You just need to visit the income tax portal and login to download the relevant form for an income tax refund. Enter all the particulars and submit the form. If the employer has deducted tax when you are not eligible for it, you can claim the amount by filing income tax returns (ITR).

Is it mandatory to file nil TDS return?

Legally there is no need to file Quarterly TDS Return/ Statement where no tax has been deducted at source. NSDL is also of the view that it is not at all compulsory to file NIL return, if deductor has not deducted any tax at source or if there is no transaction at all for a particular period.

Is GST charged on catering?

Restaurant, catered or eat-in food is subject to GST. Hot takeaway food is subject to GST. ... Mixed businesses may be entitled to use simplified accounting methods for determining what proportion of their sales relates to GST-free food and what relates to taxable sales.

Is GST payable on catering services?

7,500. 18% GST on food services including delivery of food provided by a restaurant/food joint located within premises of a club, guest house, etc. 18% GST applicable to all outdoor catering services provided.

Can we claim GST on catering?

1/2017-CGST (R) and most of the food preparation and beverages attracts 18% GST. GST rate for restaurant service and catering service is provided in Notification No. 11/2017-CGST (R) and the rate specified is 5% subject to the condition that ITC shall not be availed.