Tds on trasnporters

This query is : Resolved

sunita jain (Querist)
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14 July 2015 prior to 1.6.2015 all the payment to transporter was exempt who were having PAN,
Now it is exempt only if gives certificate of having less than 10 vehicles, if person is having more than ten vehicles , already payment made more than 75000/- prior to 1.6.2015 , so now tds will be deducted on new payment or on all the payment made upto date?

Arpit Shah

Arpit Shah (Expert)
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14 July 2015 http://taxguru.in/income-tax/tds-payments-transporters-amendment-section-194c-wef-june-1-2015-undertaking-format.html

Arpit Shah

Arpit Shah (Expert)
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14 July 2015 http://taxguru.in/income-tax/tds-deductible-payment-transporters-owing-10-goods-carriage.html

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Arpit Shah

Arpit Shah (Expert)
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14 July 2015 http://taxguru.in/service-tax/service-tax-goods-transport-agency-gta-guide.html

Ankur Singhal

Ankur Singhal (Expert)
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14 July 2015 Dear Sunita

TDS will be deducted on the payments made after 1/06/2015 as before this date no implication was there to deduct TDS.
So only need to deduct TDS on payments after 01/06/2015.

CMA Gul S

CMA Gul S (Expert)
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14 July 2015 Introduction
Section 194C of the Income Tax Act, 1961 prescribes that any payment to a contractor is subject to a Tax Deduction at Source (TDS) at the rate of:
1% in case the payee is an Individual or a Hindu Undivided Family, and
2% in case of other payees (i.e. partnership firm, company, trust, body of individuals or association of persons)
if such payment exceeds Rs. 30,000 per contract or aggregate of such payments of contracts in a financial year exceeds Rs. 75,000.
TDS on account of a contractor during the course of plying, hiring and leasing goods carriage
Earlier Provision
The earlier provision (upto May 31, 2015) provides that no deduction of tax is required from payments made to the contractor during the course of plying, hiring and leasing goods carriage if the contractor furnishes his PAN to the payer.
New Provision effective June 1, 2015
The new provision of Section 194C, as was informed earlier at the time of the Union Budget, restricts the cases for non-deduction of tax. Non deduction of tax will be available only for small transport operators owning not more than 10 goods carriages.
The relevant extract of the amended provision is as under:
“Section 194C
Sub section (6)
No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of plying, hiring and leasing goods carriages, where such contractor owns ten or less goods carriage at any time during the previous year and furnishes a declaration to that effect along with his Permanent Account Number, to the person paying or crediting such sum.”
This provision comes into force from June 1, 2015.
Analysis:
If transporter is not owning more than 10 goods carriage at any time during the previous year, then we, as payers (Tax deductors) have to obtain a declaration from transporter along with his copy of PAN before credit or payment to transporter, whichever is earlier.