Tds under 194 i or 194 c

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MANAN VORA (Querist)
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25 May 2012 Hello Friends,

We are receiveing service. The nature of service is devlopment or sizing of input material. For this purpose, the service provider are using machineries.

Now they are raising bills containg "CHARGES FOR THE USAGE OF MACHINERY ".

Now the question is under which section,we should deduct TDS, 194 C OR 194 I?

I expect answer be supported by specific judgement or law.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 May 2012 The Service received by you may be -
1. Machinery taken on Rent and it is run by your workers.

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TDS will be Deducted U/s 194I.
(Please Refer Explanation (i) to Section 194I defining Rent.)
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2. Machine is run by the owner of the Machinery-
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In such a case it is deemed that such person has been engaed by you to perform "any work" and he will be deemed as a contractor. TDS Section 194C will be applicable. Please refer Section 194C(1).
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