Retention and TDS in sub con bill

Question

Accepted Answer

Retention and TDS are important factors to consider in subcontractor billing.

Retention refers to the amount of money withheld by the client as a form of security against any defects or issues that may arise after the project is completed.
TDS (Tax Deducted at Source) is the tax deducted by the client from the subcontractor's payment and deposited with the government.
Both retention and TDS should be clearly mentioned in the subcontractor's bill to avoid any confusion or disputes.
For example, if the subcontractor's bill is for $10,000 and the retention is 10%, the client will withhold $1,000 until the project is completed satisfactorily.
Similarly, if the TDS rate is 10%, the client will deduct $1,000 from the subcontractor's payment and deposit it with the government.
It is important for the billing engineer to understand the retention and TDS policies of the client and ensure that they are accurately reflected in the subcontractor's bill.

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