| Question And Answer | |
|---|---|
| Subject: | Purchase of T-shirt with school logo |
| Category: | Income-Tax |
| Querist: | Sumit |
| Answered by: | Law Intern |
| Tags: | sales contract, TDS u/s 194C, TDS U/S 194Q, works contract |
| Date: | April 1, 2025 |
Whether tds applicable on purchase of t-shirt with school logo for students? If yes, what will be the tds rate??
The answer depends on whether the contract is a “works contract” or a “sale contract”.
If the supplier procures the t-shirts and prints the school logo using their own materials, delivering a finished product to the school, this is a sale of goods, and TDS under Section 194C does not apply.
If the school provides plain t-shirts to the supplier, who then prints the logo and returns them, this is a work contract, and TDS under Section 194C would apply.
TDS under Section 194C is applicable only if the payment exceeds ₹30,000 for a single transaction or ₹1,00,000 in aggregate during the financial year.
Rate: If applicable, the TDS rate is 1% for payments to an individual or HUF contractor, and 2% for payments to other entities (e.g., a company or partnership), provided the contractor’s PAN is furnished. If PAN is not provided, the rate increases to 20%.
Section 194Q will apply if the buyer’s turnover, sales, or gross receipts from business exceed ₹10 crore in the previous financial year and the purchase value from a single supplier exceeds ₹50 lakh in the financial year.
The TDS rate under Section 194Q is 0.1% on the purchase value exceeding ₹50 lakh, provided the supplier’s PAN is furnished. If PAN is not provided, the rate increases to 5%.