Car Hire Charges: We have taken a car for hire from a subsidiary company against which fixed rentals will be paid . Driver, Fuel , Maintenance taken care by the Holding company, Subsidiary gets only monthly rentals now is it 194 I 0r 194 C.
2. Rentals for photo copier machine:
We have hired Photo copier machine. As per the contract owner gets amount like 0.25 per copy, cartridge gives by owner and parer provides by company. Now is it 194 I or 194 C for company.
I know tax rate is 2% but still matter of select correct code I am asking.
31 December 2013
see in case 1, you are taking a vehicle on rent with a fix rental amount and rest all the expenses are yours. It is more in the nature of rent. therefore 194I. In this case had you took the vehicle on the basis of payment for per km, it could have been considered as 194C.
Whereas in case 2, the payment is more or less linked to the usage (per paper payment), which assumes nature of a contract. Therefore 194C.
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