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194 I or 194C

10 May 2007

Please clarify me about whether computer hiring Charges are tax deductible under whic section whether 194I or 194C Please ref the Finance act 2006 for change in meaning of RENT

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Sambu Suresh (CA Job) (564 Points)
Replied 10 May 2007

as the computer falls under the head plant as per the defination given in the income tax , the hire charges on the computers will be taxable under section 194 I and not under section 194C .

further, in the new budget the rate of deduction on hire charges of the plant was changed to 10% from 15% or 20%.

if any one have the different view , can share their view with the logical reasons.

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The One (379 Points)
Replied 10 May 2007

The One Says:

In a discussion regarding equipment hire charges it was stated that based on whether it was hiring out or rendering a service by making available the equipment would be the factor for deciding applicability of 194I or 194C. Similar view can be taken here.