Car hire charge

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Querist : Anonymous

Querist : Anonymous (Querist)

20 July 2010 Fixed rental car hire charges are covered under 194C or 194I ?

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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20 July 2010 u/s 194C

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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20 July 2010 AGREE WITH BANSAL SIR,

DEAR ANONYMOUS,
when ever taxi or any other vehicle booked for a specific Job like giving a contract to take employees from home to office and office to home .In these type of work a specific job has been assigned to vehicle and vehicle has not been hired as such so it should be covered u/s 194C and not under section 194I .

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Querist : Anonymous

Querist : Anonymous (Querist)

20 July 2010 If there is fixed monthly rental for car then why it should not be covered under 194I actually rent are covered under 194I then why not car ?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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20 July 2010 Meaning of Rent for the purposes of Section 194-I: any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any of the following whether any or all of them are owned by the payee or not:

1. Land

2. Building including factory building

3. Land appurtenant to a building including factory building.

4. Machinery

5. Plant

6. Equipment

7. Furniture

8. Fittings

Car does not fall in any of above category...

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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20 July 2010 DEAR ANONYMOUS,

Relevant circular on this issue:Circular : No. 558, dated 28-3-1990.

AND Supreme Court judgment in Associated Cement Co. Ltd. v. CIT [1993] 67 Taxman 346/201 ITR 435,

Rate under the section:
U/s 194 C basic rate 2 % minimum limit per contract 20000 or 50000 per annum.

REGARDS

Querist : Anonymous

Querist : Anonymous (Querist)

20 July 2010 Is there is any provision in income tax that car should be covered under machinery for the purpose of 194I

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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20 July 2010 No,There is no provison in income tax that carw will be covered under machinery for purpose of seciton 194I.
Now close the matter. TDS will be charged u/s 194C.

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