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Contractor bill deduction calculator
Short answer
On a works contract bill, GST is added to the bill amount. Income-tax TDS (194C), GST TDS (government clients), BOCW cess and security deposit are then taken off. All are worked out on the bill amount before GST.
Who is the client?
You are
GST rate
BOCW labour cess 1%
You will receive
₹10,80,000.00
from an invoice of ₹11,80,000.00
- Bill amount
- 10,00,000.00
- + GST 18%
- 1,80,000.00
- − Income-tax TDS (194C) 2%· back in Form 26AS
- 20,000.00
- − GST TDS 2%· back in GST cash ledger
- 20,000.00
- − BOCW cess 1%· a cost, not refunded
- 10,000.00
- − Security deposit 5%· refunded after the maintenance period
- 50,000.00
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Deducted is not the same as lost
| Deduction | Rate | Comes back? |
|---|---|---|
| Income-tax TDS (194C) | 1% or 2% | Yes, as credit in Form 26AS against your income tax |
| GST TDS | 2% | Yes, in your GST electronic cash ledger once you accept it |
| Security deposit | As per agreement | Yes, after the maintenance period |
| BOCW cess | 1% | No, it is a cost to price into the quote |
On the ₹10 lakh example above, ₹1 lakh is held back but only ₹10,000 (the cess) is gone. The rest is your money arriving later.
Questions
How much TDS is deducted on a contractor bill?
Under section 194C, 1% when the contractor is an individual or HUF and 2% for a firm or company, on the bill amount before GST when GST is shown separately.
When is GST TDS deducted?
When the client is a government department, local authority or government agency and the contract value is above ₹2.5 lakh. It is 2% (1% CGST and 1% SGST, or 2% IGST) of the value before GST.
Which deductions come back?
Income-tax TDS is credited in Form 26AS, GST TDS is credited to your GST cash ledger, and security deposit is refunded after the maintenance period. BOCW cess does not come back; it is a cost.
Is the cess worked out on the amount with GST?
The cess is levied on the cost of construction, which does not include GST. Some departments still deduct it on the gross bill, so check the deduction clause in your agreement.