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DEDUCTION OF TDS

manoj (student) (93 Points)

19 October 2007

whether tds should be deducted if a delievery van is taken on hire

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30 Replies

Pandiri Ramu (Business Analyst) (613 Points)
Replied 19 October 2007

it should be deducted i.e. 11.33% on Invoice amount

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pankaj (Taxation expert) (63 Points)
Replied 19 October 2007

yes. Under 194C @ 2.27%

Dayal (Gen. Manager - Indirect Taxation) (3434 Points)
Replied 19 October 2007

Yes TDS will need to be deducted on the hire charges paid to the Transporter Provisions of Section 194I, in my opinion, are applicable when the possession of the asset in question is given to the hirer so that he may use it. In case the possession is not given but retained by the person letting it on hire, provisions of section 194C shall apply.

Nikhil Gupta (Deputy Manager Accounts) (25 Points)
Replied 19 October 2007

cant we take it as contract n then deduct TDS @ 2.27%

Ramakrishna (Financial Executive) (438 Points)
Replied 19 October 2007

No. As rightly pointed out by Mr.Dayal, the possession of the assetto be used on hire is more crucial to determine the applicability of 194I or 194C. This is in view of the amendment brought into force on and from 01.04.2007.

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Rachana Gadage (Account Executive) (136 Points)
Replied 19 October 2007

i think under Sec 194 C u have to deduct @ 2.27%

(Guest)

PLEASE SEND ALL THE LATEST INCOME TAX DETAILS, ASTANDARDS, RULES, FORMS,

(Guest)

why not ? its like any other contract.

(Guest)

Dear Sir, Please send me Rate of TDS

Dayal (Gen. Manager - Indirect Taxation) (3434 Points)
Replied 20 October 2007

I am posting views of one of my learned colleague which relates to the subject This is most common query now , because of overlapping appearance of two provisions i.e section 194C and 194 I. The amendment to section 194 I from 13.7.2006 , the explanation regarding meaning of rent was substituted to include payment for use land ,building, machinery, plant ,furniture ,equipment or fittings .The exact wording is as under This has now created a confusion regarding renting of plant and machinery . For example , as in your case, confusion whether the rental of car , which certainly is coming with definition of plant or machinery , is well founded. Earlier the rental of car was being subject to TDS u/ 194 C . Views Expressed are as under The provision under section 194C is for any kind of work contract whereas the provision under section 194I is for payment for use of things as stated in Explanation under section 194I. This is the fundamental difference between the two provision. Therefore, if there is an agreement to carry the employee from some place to some place i.e let us say from home to factory or office , such agreement is giving a job to the car supplier company and the car company will get payment only when the work assigned to it , was completed. If he supplies only the car, the company will not pay the amount , because the contract /agreement was for the work of transport of employee. This type of job , which involves , supply of equipment, is covered u/s 194C . However, if the company hires the car without any assignment of job, the car supplier completes the job the moment he sends the car . How the car is used is of no importance for him . He will get paid for car hire. This type of car hire will suffer TDS u/s 194 I . Hence, facts needs to be checked , if given a contract for transport of something by the vehichle /car you give on hire or the company simply hires car without assignment of any job.

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Dayal (Gen. Manager - Indirect Taxation) (3434 Points)
Replied 20 October 2007

TDS Rates For FY 2007-08 cut paset the link on your browser and you shall have the same https://www.taxworry.com/2007/03/what-are-tds-rates-for-fy-2007-08_24.html

Dayal (Gen. Manager - Indirect Taxation) (3434 Points)
Replied 20 October 2007

Dear Ramasankar for all your enquires visit https://incometaxindia.gov.in/

Miss Komal Mantri (Chartered Accountant ) (1974 Points)
Replied 20 October 2007

Yes... I think TDS shld be deducted as per the provision of section 194 I... Mr manoj kr.ladhar kindly elaborate ur question...regarding the agreement....so that more appropriate answer can be given....