(2) Any person (being a contractor and not being an individual or a Hindu undivided family) responsible for paying any sum to any resident (hereafter in this section referred to as the sub- contractor) in pursuance of a contract with the sub- contractor for carrying out, or for the supply of labour for carrying out, the whole or any part of the work undertaken by the contractor or for supplying whether wholly or partly any labour which the contractor has undertaken to supply shall, at the time of credit of such sum to the account of the sub- contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income- tax on income comprised therein.
Explanation 1-For the purposes of sub- section (2), the expression" contractor" shall also include a contractor who is carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and the Government of a foreign State or a foreign enterprise or any association or body established outside India.] 2
II].- For the purposes of this section, where any sum referred to in sub- section (1) or sub- section (2) is credited to any account, whether called" Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.] 4
Explanation III.- For the purpose of this section, the expression" work" shall also include-
broadcasting and telecasting including production of programmes for such broadcasting or telecasting;
carriage of goods and passengers by any mode of transport other than by railways;