03 March 2008
For deciding whether the payment of hire charges by the employer to the agency attracts deduction of tax under Section 194-I or Section 194C, the terms of the contract between the parties need to be examined.
If the agreement is for leasing of the car per se, the payment would attract tax deduction under Section 194-I.
However, if the agreement is for a service of transportation to be provided by the agency, the payment would attract tax deduction under Section 194C .
CAclubindia
