Tds on rental car

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 May 2012 Dear Experts

We are hiring car for monthly basis. In invoice mentioned rental charges for the period.In which section TDS will deduct?

194 c or 194 I .

Siju Joseph

Siju Joseph (Expert)
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14 May 2012 Many debates and discussions are already taken place on this.

On hiring charges it will be "194 I"

Mihir Doshi

Mihir Doshi (Expert)
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14 May 2012 Dear Expert

Could you clarify, how Rental Charges on hiring of Car comes under 194I???

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Siju Joseph

Siju Joseph (Expert)
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14 May 2012 Hi,

You can refer the Board Circular No.715 dated 8-8-1995 which clarify deduction of the tax and section 194C of the IT Act is applicable any mode of transport is chartered by one of the entities mentioned in section 194C of the IT Act and work in section 194C of the IT Act continuously remain in the statute book and such interpretation of the provision would not controvert or the general provisions contained in the section. ,therefore, if the assessee paid the rent for hiring out any assets then he has to deduct tax at sources u/s 194-I of the Act.