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its urgent

shiva (assistant manager finance) (65 Points)

15 May 2009

friends can you help me on hire charges payable on vehicles. Does it comes under section 194i or C

Please refer any circular or any notification for ur answer

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4 Replies

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 15 May 2009

If there is agreement then it will come under 194C otherwise Sec 194i

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shiva (assistant manager finance) (65 Points)
Replied 15 May 2009

Originally posted by :CA CS Prakash Somani (A helping Hand)*
"	If there is agreement then it will come under 194C otherwise Sec 194i	"

can you substantiate ur answer

RAJESH GURBANI (CA) (32 Points)
Replied 15 May 2009

Whereas Explanation (i) to the section 194-I defines rent means any payment, by whatsoever name called, under lease,sub-lease,tenancy or any other agreement or arrangement for the use of any "MACHINERY OR PLANT OR EQUIPEMENT" (Apart from other assets) and Vehicle belongs to assets category of Machinery and Plant.Therefore TDS on payment of hiring vehicle shall be U\s 194-I.

CA-ASPIRANT (CA-STUDENT ) (650 Points)
Replied 15 May 2009

Shiv Sir,

Actually No circular or notification was issued only explaination was elaborated.

Below MACHINERY IS ENCLUED IN THE EXPLAINATION TO 194 I WHICH INCLUD VAHICLE.

in brief , i say TDS shall be deducted under u/s 194 I .

FOR SUBSTANTIATE MY ANSWER FOLLOWING IS TAKEN FROM INCOME TAX ACT, 1961.

[Rent.
⁸194-I. Any person, not being an individual or a Hindu undivided family, who is responsible for paying to ⁹[a resident] any income by way of rent¹⁰, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, ¹¹[deduct income-tax thereon at the rate of

¹²[(a) ten per cent for the use of any machinery or plant or equipment;

(b) fifteen per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings where the payee is an individual or a Hindu undivided family; and

(c) twenty per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings where the payee is a person other than an individual or a Hindu undivided family:]

Explanation.For the purposes of this section,

¹⁴[(i) rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,

(a) land; or

(b) building (including factory building); or

(d) machinery; or

(e) plant; or

(f) equipment; or

(g) furniture; or

(h) fittings,

whether or not any or all of the above are owned by the payee;]