suppose a client x (pvt ltd co.) is providing trucks on rent basis by making contract of 3 years with a company y(pvt ltd co), now
1-whether y co while making payment of rent every month will deduct tds of x co under section 194 c @ 2% or
2-whether y co will deduct tds of x co under section 194 i @10% whether contract or rent which basis? also does section 194 I covers all types of ,rents, or it has some limitation if any reference of case law can be provided it will be great help
03 October 2012
IN the given case , the contract is for the renting of the trucks and hence the provisions of sec. 194 I will get attracted. Applicable TDS rate is 2%.
Explanation to Sec. 194 I provides that besides on land & building , tax shall be deductible for leasing or hiring of machinery, plat, equipment, furniture & fittings whether or not owned by the payee.
05 October 2012
but sir provision of 194 i covers only two types of rents one is rent of plant & machinary second is of building & furniture etc for both of above rates are also fixed in 194 i does it not prove that section is not applicable to any other cases than above two it is only applicable to p&m or building & furniture for p& m rate is 2 % for building & furniture rate is 10%
Block of Plant & Machinery covers Motor Cars, motor Buses, Commercial Vehicle etc. Thus, by implication for the purpose of TDS u/s 194 I Vehicles is to be categorised under the head Plant & Machinery.
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