TDS ON BUS HIRE

This query is : Resolved 

30 October 2008 WHEN COMPANY IS USING BUS FACILITY TO BRING EMPLOYEES TO FACTORY. THE BUS IS HIRED BY THE COMPANY. AT WHAT RATE TDS SHOULD BE DEDUCTED ON THE PAYMENTS MADE TO THE BUS PROVIDER.

30 October 2008 It should come under 194C (Contracts).

30 October 2008 It is under section 194C only...

**DM
CRaZy aCCouNTaNTS


30 October 2008 The Rate of TDS u/s 194C is 2% plus surcherge as applicable plus 3% education cess.

31 October 2008 If the Bus is hired exclusively by the company then TDS applicable for renting will have to apply in my opinion.

31 October 2008 In My Opinion Also TDS applicable for Rent Will Have To Be Considered.

31 October 2008 Yes. In my opinion also, Section 194I is applicable

31 October 2008 Dear Sirs,
If bus is taken on hire and all maintenance expenses including drivers salary is being born by company then definitely its under purview of section 194I otherwise in any case section 194C is clear about that.

**DM
CRaZy aCCouNTaNTS


31 October 2008 The section 194 I is related with the rental /hire charges payment which was limited to land & building rental till 13th July 2006 but w.e.f 14th July 2006,the coverage of section 194 I has been expanded to the equipments,plants ,machineries ,furnitures, computers and vehicles rental/hire charges payments.
( in the cases where fixed nature of service is absent and hired P&M or vehicles are used in the random discretion of the service receiver).

Hence, we must exclude the rental payments from the purview of section 194C and TDS should be as per specified rate under section 194I of Income Tax Act.


The TDS rates u/s 194 I are as under –


194 I _ Rent of Land/building _ 20.60%(1 Crore)

194 I_ Rent of P& M (DG Sets, Cars, Wireless etc)
10.30%(1 Crore)


If the vehicles in site has been taken on rent and at the fixed contract of pickup/drop facility of staff (work specified),hence in presence of work as per definitions under 194C,the section 194I will not be attracted.The detailed circular of CBDT No:681 is attached herewith for your reference

http://icai.org/resource_file/97641223-1225.pdf

31 October 2008 The situation is simple. If the Bus is taken on hire fully meaning the entirety 194I is applicable. On the other hand if it is hirec for just pick uo and drop 194C is applicable.

05 November 2008 there are conflicting opinions what shoud i take as final one.

09 November 2008 Nilesh Shah Replies:
Cell: 92246-59941
E mail: nilesh63@vsnl.com

The Rule of Interpretation of Statutes is specific overrides the general. Explanation III to section 194C defines work as transportation of goods or passengers by any mode of transport. TDS needs to be deducted under section 194C.

Explanation to section 194I defines rent & your case does not come under the definition of rent.




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