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TDS us 194C

22 July 2021

X (liable for Tax Audit) is a transport contractor of an Oil Marketing Co engaging his own 15 Oil tankers and 2 taken on hire from Y. Oil Marketing company is making payment to X after deduction of TDS us 194C.
Now my query is that whether X will make deduction us 194C at time of payment to Y.
Please advise.

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8 Replies

shiva sai (student) (76 Points)
Replied 22 July 2021

The Answer is Yes.

as X is liable for Tax audit he must deduct tax at the time of payment.

or he must get Form 26A declaration from Y.

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shiva sai (student) (76 Points)
Replied 22 July 2021

The Answer is Yes.

as X is liable for Tax audit he must deduct tax at the time of payment.

or he must get Form 26A declaration from Y.

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 22 July 2021

Yes TDS should be deducted

CMA Poornima Madhava (CMA) (13112 Points)
Replied 22 July 2021

Since X would be hiring tankers from Y, can I say that the provisions of section 194I would apply here? Let's see what others interpret this as.

manikanta juluri (student) (47 Points)
Replied 22 July 2021

TDS deducted u/s 194C.
Section 194I related Rent of Plant and Machinery not for Hire

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 22 July 2021

@ Manikanta

What's the difference between rent and hire?

Anjali P Nair (ACA,ACMA) (582 Points)
Replied 23 July 2021

Yes. Tax shall be deducted under section 194 C since MR X liable to tax audit and carrying more than 10 Goods carriages.(Exception shall be available to transporters only if they are covered under 44 AE)

Tax shall be deducted either at the time of credit or the time of payment whichever earlier

@ 1% if Payment / Credit to resident individual or HUF(75% of original rate concession only available up to 31.03.2021)

@ 2% if Payment/Credit to any resident person other than individual / HUF(75% of original rate concession only available up to 31.03.2021)

@ 0% if payment made to contractors(only to transporters covered under 44 AE)