08 June 2009
YES YOU ARE CORRECT.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)
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