TDS on job work is generally deducted when the payment falls under Section 194C and the amount crosses the applicable threshold. For a single contract, TDS is usually deducted when the payment to a resident contractor/job worker exceeds Rs. 30,000 ; if there are multiple payments in the year, the aggregate limit is Rs. 1,00,000.

When to deduct

  • Deduct TDS at the time of credit or payment, whichever is earlier.
  • If the job work is treated as a contractor payment under Section 194C, the rate is typically 1% for individuals/HUF and 2% for others.
  • If the job worker does not provide PAN, higher withholding may apply.

Common practical point

If you give raw material to someone for processing and they do job work on it, this is often treated as a contractor-type arrangement for TDS purposes under Section 194C.

Simple example

If you pay a job worker Rs. 50,000 for a qualifying contract, TDS would usually be deducted when making the payment or booking the expense, subject to the threshold and the worker’s status.

Quick note

The exact treatment can change based on the contract structure, whether materials are supplied by you, and whether the payment is really job work, labor charges, or a different service.

If you want, I can also give you the exact TDS rate and threshold in a clean HTML table.