TDS ON TRANSPORTOR

This query is : Resolved

CAKalpesh B. Shah (Querist)
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22 October 2008 HELLO FRIENDS,
tHE INDUSTRY IN WHICH I'M WORKING IS SUCH THAT WE HAVE TO FREQUENTLY MAKE PAYMENTS TO TRANSPORTERS HAVING BILTY/GR OF SOME TRANSPORT UNIONS.
1. THE MAJOR PROBLEM IS THAT THE DRIVERS DONOT PROVIDE THE PAN NO OF UNION/SELF.
THE REASON FOR THAT THE TRANSPORT UNIONS MIGHT BE FAKE/TEMPORARY. MOREOVER THEY SAYS THAT THEY DON'T NEED FORM 16 FOR TDS DEDUCTION.
SO WHAT IS THE SOLUTION TO THE PROBLEM.
2. THE DRIVERS DEMAND CASH PAYMENTS AS THEY DON'T HAVE BANK ACCOUNTS.
BUT, WE CAN'T MAKE CASH PAYMENT EXCEEDING 20,000 IN CASH.
SO WHAT IS THE SOLUTION TO THE PROBLEM

CAKalpesh B. Shah

CAKalpesh B. Shah (Querist)
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22 October 2008 D

Reetika Goel

Reetika Goel (Expert)
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22 October 2008 Hello Mr. Kalpesh,

First of all make it clear that whether the Transport Union with whom you deal has entered into a contract with you or not?

Secondly, even if it has not, then also you are required to deduct TDS u/s 194C @ 2% on any payment made to them.

The Consequence, if you fall in their trap and don't deduct there TDS will be
"Disallowance of expenditure on your part".

Best solution to this problem is to explain them the Benefits of having PAN and make them apply for the same.

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