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TDS on Vehicle Rent

Vinayak Kamath (Article Student) (75 Points)

22 February 2011

If vehicle is given on rent for hire for Rs. 50000/- per month on a contract basis, and TDS is deducted, will it be covered U/s 194C or 194I?

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9 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 22 February 2011

If u give it on contract basis than deduct tds u/s 194c.

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Abhishek Ravi (Student) (32 Points)
Replied 22 February 2011

I think its apt to put it under 194 I if only vehicle is let to hire (Ex : rent-a-cab). However, if driver and vehicle is given and the charge is per cost unit, it is sensible to put it under 194 C. However, a circular regarding TDS,on Contract w.e.f 1.10.2009 has made the deduction to 2 %. Accordingly, there will not be any practical difference in these two sections.

Milan Maheshbhai Lakhani (Article Clerk) (89 Points)
Replied 22 February 2011

Since the vehicle is given on contract basis, TDS deducted will be covered u/s. 194C

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 22 February 2011

To decide under which section it should be covered I have underlined some major points

Car on specific job :when ever vehicle booked for a specific Job like giving a contract to take employees from home to office and office to home .In these type

of work a specific job has been assigned to vehicle and vehicle has not been hired as such so it should be covered u/s 194C and not under section 194I

Control of owner of vehicle :In most of the time vehicles are hired with driver and control of the vehicle remain with the owner of the vehicle through driver,but this is not

the deciding factor at all though its a point to be considered,whenever the control of vehicle remains with the the owner of the vehicle then it generally means that vehicle is specific job and not hired as such ,so deduction should be under 194C .but some times vehicle with drivers are also hired without specific jobs in that case person who has hired the vehicle can travel on it any where thought there may be some restriction but point is that no specific job has been assigned ,so in this case it will be covered under section 194-I

Contract agreement :The main paper which will decide the issue is contract agreement and issue will be decided mainly on the basis of the term of agreements and if there are

slight differences from contract that can be ignored.

Running & maintenance If running & maintenance expenses like petrol,repair etc has been incurred by the person who has hired the vehicle then we can say that it should be covered under section 194-I

Thanks and Regards

Manoj

(Guest)

Originally posted by : Milan Maheshbhai Lakhani
	Since the vehicle is given on contract basis, TDS deducted will be covered u/s. 194C

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Karan Teli (Life Is just an Illusion...!!) (4573 Points)
Replied 23 February 2011

Originally posted by : Manoj B. Gavali
	To decide under which section it should be covered I have underlined some major points Car on specific job :when ever vehicle booked for a specific Job like giving a contract to take employees from home to office and office to home .In these type of work a specific job has been assigned to vehicle and vehicle has not been hired as such so it should be covered u/s 194C and not under section 194I Control of owner of vehicle :In most of the time vehicles are hired with driver and control of the vehicle remain with the owner of the vehicle through driver,but this is not the deciding factor at all though its a point to be considered,whenever the control of vehicle remains with the the owner of the vehicle then it generally means that vehicle is specific job and not hired as such ,so deduction should be under 194C .but some times vehicle with drivers are also hired without specific jobs in that case person who has hired the vehicle can travel on it any where thought there may be some restriction but point is that no specific job has been assigned ,so in this case it will be covered under section 194-I Contract agreement :The main paper which will decide the issue is contract agreement and issue will be decided mainly on the basis of the term of agreements and if there are slight differences from contract that can be ignored. Running & maintenance If running & maintenance expenses like petrol,repair etc has been incurred by the person who has hired the vehicle then we can say that it should be covered under section 194-I Thanks and Regards Manoj

Maheshkumar Sharma (CA) (134 Points)
Replied 23 February 2011

it is under 194 I as hire of Machinery and TDS will be 2 %.

one can also book it under 194 c, as the rate is the same there is no difference at all.

shailesh maheshwari (accountant) (28 Points)
Replied 27 June 2011

Please provide us vehicle rent agreement former.

vipink das (2 Points)
Replied 04 July 2019

i have 10 vehicles and its running for many companies like ultratech cements,zuari etc. and it is not on contract basis.. may i want to pay any sum to to government? i think the company has to deduct TDS on the rent. and may i now the criteria of TDS on rent(vehicle) for carrying goods? please give me a reply ASAP.