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194 I / 194 C

SIRISHA TUSHARA P (Chartered Accountant) (42 Points)

28 January 2009

Hai Friends.....I m here with a doubt regarding the deduction of tax at source in respect of "taking a boat on rent"...Under what section does Taking a boat on rent attract TDS.. whether 194 C or 194 I? Is Boat an equipment or a vehicle?

I understand from sec. 194 C that

a) if at all the person giving a boat or a vehicle on rent including the driver or the crew for a transport contract, then it becomes a "transport contract''.

b) even if the person who takes the boat or vehicle on rent ...(just rent)..it comes only under sec.194I irrespective of the fact whether the person who takes it uses for transportation of people or cargo.

I request u to give clarification on this...very urgent pls.....

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6 Replies

Abhinav Agarwal (M.Com C.A SAP Consultant) (814 Points)
Replied 28 January 2009

Hi..

Your content is absolutely correct. My opinion is that the TDS to be deductible will be decided on the basis of terms of contract between the parties.

If terms support that the payment to be made is by way of Rent, Sec 194 I will be applicable.vise versa.

thus the terms of contract need to be read carefully.

Regards,

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Abhinav Agarwal (M.Com C.A SAP Consultant) (814 Points)
Replied 28 January 2009

Hi..

Your content is absolutely correct. My opinion is that the TDS to be deductible will be decided on the basis of terms of contract between the parties.

If terms support that the payment to be made is by way of Rent, Sec 194 I will be applicable.vise versa.

thus the terms of contract need to be read carefully.

Regards,

Nikhil Kumar (CA , Qualified CPA) (910 Points)
Replied 28 January 2009

there is one more point that can be used to differentiate a transport contract with renting-

in transport contract, it is the duty of transporter to make the customer/service receiver reach the destination- may be thats why he is supplying the crew also
in rent contract- the service receiver just hires the vehicle to be used at his own will

(this is my personal opinion, i dont know if this is related to law or not)

Nikhil

NKA Accounting Solutions

Vinod Jain (Practising Chartered Accountant at Durg since 1983) (1546 Points)
Replied 28 January 2009

Originally posted by :SIRISHA TUSHARA P
"	Hai Friends.....I m here with a doubt regarding the deduction of tax at source in respect of "taking a boat on rent"...Under what section does Taking a boat on rent attract TDS.. whether 194 C or 194 I? Is Boat an equipment or a vehicle? I understand from sec. 194 C that a) if at all the person giving a boat or a vehicle on rent including the driver or the crew for a transport contract, then it becomes a "transport contract''. b) even if the person who takes the boat or vehicle on rent ...(just rent)..it comes only under sec.194I irrespective of the fact whether the person who takes it uses for transportation of people or cargo. I request u to give clarification on this...very urgent pls..... Correct	"

Pratik K (Student) (3406 Points)
Replied 29 January 2009

Originally posted by :Vinod Jain
"	Originally posted by :SIRISHA TUSHARA P " Hai Friends.....I m here with a doubt regarding the deduction of tax at source in respect of "taking a boat on rent"...Under what section does Taking a boat on rent attract TDS.. whether 194 C or 194 I? Is Boat an equipment or a vehicle? I understand from sec. 194 C that a) if at all the person giving a boat or a vehicle on rent including the driver or the crew for a transport contract, then it becomes a "transport contract''. b) even if the person who takes the boat or vehicle on rent ...(just rent)..it comes only under sec.194I irrespective of the fact whether the person who takes it uses for transportation of people or cargo. I request u to give clarification on this...very urgent pls..... Correct "	"