Explain the procedure with regard to deduction of tax at source by a Co-operative Society when the payment above Rs. 20,000/- have been paid to a contractor for repairs and maintenance ?
Ans. In case of payment to contractors by a co-operative society exceeding Rs. 20,000/- the tax is required to be deducted at the time of credit or payment, whichever is earlier. The rate of tax to be deducted at source is 2% in case of payment to contractor and 1% in case of payment to sub-contractor. The tax deducted at source should be deposited in Government Account within 1 week from the last day of the month in which the dedution is made. The person deducting tax is required to file Annual return in form No. 76c by 30th June. The person deducting tax is also required to give certificate within one month from the end of the month during which credit/payment is made, in Form No. 16A to the payee.
