Section 194C (1) is applicable even where the contract is between an Individual or a HUF and a Contractor provided the total sales, gross receipts or turnover from the business or profession carried on by the such Individual or HUF exceeds Rs. 40, 00,000/ 10, 00,000 as the case may be being the limits specified for tax audit u/s 44AB, during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor.

PLEASE NOTE:

• No tax is to be deducted by such Individual/ HUF under this section if the amount is credited or paid before 1st June' 2007. However for computing the limit of Rs. 50,000 for a financial year, the amount paid or credited before 1st June' 2007 shall also be considered.
   

• 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, on furnishing of his Permanent Account Number, to the person paying or crediting such sum