TDS on Transpoter
Sravan Reddy G (CA) (618 Points)
03 June 2018
TDs on Transporter is nil if no pan 20% as per 194C. Can anu one tell me example.
1 Replies
CA Sunil Kumar
(Chartered Accountant)
(4524 Points)
Replied 03 June 2018
On the whole amount 20% tds will be deducted as pan is not provided if limit exceeds 100000/-.
Introduction to Section 194C
Section 194C of the Income Tax Act, 1961 states that any payment to a contractor is subject to a Tax Deduction at Source (TDS) at the rate of:
1% in case if the payee is an Individual or a Hindu Undivided Family, and
2% in case of other payees (i.e. partnership firm, company, trust, body of individuals or association of persons)
In case, if such payment exceeds Rs. 30,000 per contract or aggregate of such payments of contracts in a financial year exceeds Rs. 100,000.
TDS on transporter during the course of plying, hiring and leasing goods carriage
Provision with effect from June 1, 2015
The new provision of Section 194C restricts the cases for non-deduction of tax. Non-deduction of tax will be available only for small transport operators owning not more than 10 goods carriages for the financial year.
Process identified
If the transporter is not owning more than 10 goods carriage at any time during the previous year, then deductor has to obtain a declaration from transporter along with the copy of a PAN before credit or payment to the transporter, whichever is earlier.
The transporter is liable for TDS if more than 10 goods carriage is owned at any time during the year. This deduction is done at the time of paying charges to goods transporter. TDS will be deducted at the rate of 1% or 2% as the case may be; based on the transport contractor’s status which can be identified by the 4th alphabet of the PAN.
Conclusion
With this addition to the Act, reporting all deductions w.r.t Nil TDS on transporter payment in quarterly return (26Q) is made compulsory.
The person responsible for making the payment to the transporters, which is subject to tax, is advised to collect the below documents for such transactions:
Self-attested copy of PAN Card
Declaration of the fact that such contractor is neither registered nor the owner of more than 10 goods carriages.
Introduction to Section 194C
Section 194C of the Income Tax Act, 1961 states that any payment to a contractor is subject to a Tax Deduction at Source (TDS) at the rate of:
1% in case if the payee is an Individual or a Hindu Undivided Family, and
2% in case of other payees (i.e. partnership firm, company, trust, body of individuals or association of persons)
In case, if such payment exceeds Rs. 30,000 per contract or aggregate of such payments of contracts in a financial year exceeds Rs. 100,000.
TDS on transporter during the course of plying, hiring and leasing goods carriage
Provision with effect from June 1, 2015
The new provision of Section 194C restricts the cases for non-deduction of tax. Non-deduction of tax will be available only for small transport operators owning not more than 10 goods carriages for the financial year.
Process identified
If the transporter is not owning more than 10 goods carriage at any time during the previous year, then deductor has to obtain a declaration from transporter along with the copy of a PAN before credit or payment to the transporter, whichever is earlier.
The transporter is liable for TDS if more than 10 goods carriage is owned at any time during the year. This deduction is done at the time of paying charges to goods transporter. TDS will be deducted at the rate of 1% or 2% as the case may be; based on the transport contractor’s status which can be identified by the 4th alphabet of the PAN.
Conclusion
With this addition to the Act, reporting all deductions w.r.t Nil TDS on transporter payment in quarterly return (26Q) is made compulsory.
The person responsible for making the payment to the transporters, which is subject to tax, is advised to collect the below documents for such transactions:
Self-attested copy of PAN Card
Declaration of the fact that such contractor is neither registered nor the owner of more than 10 goods carriages.
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