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

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

dear obuliranjan

good after noon

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

Sorry it is 194 I

under sec 194 I as rent for hire charges

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

TDS would be 10%

Originally posted by : OBULIRAJAN R
	TDS would be 10%

plz.plz. tell me why

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

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

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.
 

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

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 ...   

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. ;) )
 

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. ;) )

agreed...and very well explained!!!