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Under which section TDS is to be deducted 194c or 194i? why?

CA Akhilesh Verma (Practicing Chartered Accountant) (55 Points)

12 October 2011

client has taken a bus on hire and driver and conductor provided by bus owner but diesel and toll tax is to be born by company(client). in work order it is mentioned that it is for carriage of passanger(employee of company(client)). but it is made title name of 'hire of bus".under which section tds is to be deducted. plz.plz. its urgent

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25 Replies

ACMA Obulirajan R (M.Com, ACMA) (1119 Points)
Replied 12 October 2011

TDS to be deducted under Sec 194 J rental of bus.

1 Like

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CA Akhilesh Verma (Practicing Chartered Accountant) (55 Points)
Replied 12 October 2011

dear obuliranjan

good after noon

section 194J is for "FEES FOR PROFESSIONAL OR TECHNICAL SERVICES"

ACMA Obulirajan R (M.Com, ACMA) (1119 Points)
Replied 12 October 2011

Sorry it is 194 I

1 Like

valji (Accounts manager-MBA) (2150 Points)
Replied 12 October 2011

under sec 194 I as rent for hire charges

1 Like

CA Akhilesh Verma (Practicing Chartered Accountant) (55 Points)
Replied 12 October 2011

Originally posted by : valji
	under sec 194 I as rent for hire charges

under which head it goes and what will be the rate of tds

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ACMA Obulirajan R (M.Com, ACMA) (1119 Points)
Replied 12 October 2011

TDS would be 10%

CA Akhilesh Verma (Practicing Chartered Accountant) (55 Points)
Replied 12 October 2011

Originally posted by : OBULIRAJAN R
	TDS would be 10%

plz.plz. tell me why

valji (Accounts manager-MBA) (2150 Points)
Replied 12 October 2011

TDS @ 10% if rent exceed Rs 180000 P.a

CA Akhilesh Verma (Practicing Chartered Accountant) (55 Points)
Replied 12 October 2011

Originally posted by : valji
	TDS @ 10% if rent exceed180000 P.a

in section 194i 10% of tds aplicable for land, building or furnicher

and if it is under machinery rate of tds will be 2%

does it come under 194c for work of carriage of passanger

Mihir (Wealth Manager) (5293 Points)
Replied 12 October 2011

your client wanted a means to send people from one place to another. your client has obtained transport facility for taking passengers from one destination to another, and hired a contractor who provides such services using vehicles like bus. so yes, there is a possibility that TDS u/s 194C can apply here.

2 Like

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CA Mohd Anas (In Job) (56 Points)
Replied 12 October 2011

In same case we deduct TDS u/s 194C, bcoz I think it comes under contract.

1 Like

Ashutosh Biswal (Asst.Manager Finance) (283 Points)
Replied 12 October 2011

Yes , here TDS should be deducted under U/s 194 I but some friends have treated it u/s 194C...so like to say particulars of a bill is very important for treatment ...

shanil jain (CHARTERED ACCOUTANCY) (60 Points)
Replied 12 October 2011

Since the assesse is not operating the bus hence it would not be said as bus has been taken on rent, hence 194I has a bit weeker attraction in this case.

Since the operators are of the bus owner and we pay the bus owner towards the exp of bus maint, driver and conductor salary etc, it forms a composite payment like a contract for a work to be done. Hence expenses paid in the name of "HIRE CHARGES" would attract sec 194C more strongly then sec 194I.

but to avoid litigation with the AOs it is sometimes preferred to deduct tax at higher rates of 10% u/s 194I.

but as per my view it should be u/s 194C.

(thnk me if u like my reply.. m new here. ;) )

1 Like

Swapnil Jain (Finance - FP&A) (564 Points)
Replied 12 October 2011

Originally posted by : shanil jain
	Since the assesse is not operating the bus hence it would not be said as bus has been taken on rent, hence 194I has a bit weeker attraction in this case. Since the operators are of the bus owner and we pay the bus owner towards the exp of bus maint, driver and conductor salary etc, it forms a composite payment like a contract for a work to be done. Hence expenses paid in the name of "HIRE CHARGES" would attract sec 194C more strongly then sec 194I. but to avoid litigation with the AOs it is sometimes preferred to deduct tax at higher rates of 10% u/s 194I. but as per my view it should be u/s 194C. (thnk me if u like my reply.. m new here. ;) )