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TDS on fright & forwarding

shiva kumar R (Salaried) (80 Points)

16 December 2011

Can anyone share at what percentage TDS need to be deduct on fright & forwarding

Thanks & regards

Shiva

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3 Replies

CA Ketan Waghela (Partner at Elite Educare) (356 Points)
Replied 16 December 2011

Shiva ji,

TDS on freight comes under payment to contractors/ sub-contractors.

Therefore TDS should be deduced at 2% (In case the Contractor/ Sub-Contractor (Payee) is a Partnership Firm, Company, BOI other than individuals – 2%) or 1% (In case the Contractor/Sub-Contractor (Payee) is an Individual or HUF then – 1%) whichever applicable. Provided if single payment exceeds Rs. 30,000/- or Rs.75,000/- in aggregate.

In case Contractor Fails to Provide PAN then TDS rate applicable is 20%.

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shiva kumar R (Salaried) (80 Points)
Replied 24 December 2011

Hi ketan,

Thanks for responding

I heard that if vendor provides PAN card then we should not deduct TDS on fright & forwarding is it true

Can u please clarify it

CA Ketan Waghela (Partner at Elite Educare) (356 Points)
Replied 24 December 2011

Shiva ji,

if the vendor is having PAN then you should deduct TDS @ 1% or 2% whichever is applicable. But if the PAN is not available then TDS should be deducted @ 20%.