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Means of Transporter for section 194C

Amit Agarwal (General Manager - Accounts) (42 Points)

10 September 2010

Dear Sir, We are paying charges to owner's of transport vehicles for material shifting from our one godown to anohter godown or one division to another division within company premises. Please let me it should be attract for deduction of TDS u/s 194C or not

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3 Replies

Ankit Singla (B.Com (Hons.), CA) (88 Points)
Replied 16 September 2010

Hi Amit

u/s 194C

IF the transport contractor furnishes the PAN details to the contractee then no tds should be deducted.

Otherwise tds @ 20% should be deducted w.e.f. 1.04.10

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J.MEENAKSHI SOWBARNIKA (Chartered Accountant) (92 Points)
Replied 18 September 2010

TERM OF THE CONTRACT:For deciding whether the payment of hire charges by the employer to the agency attracts deduction of tax under Section 194-I or Section 194C, the terms of the contract between the parties need to be examined.

TRANSPORTATION OF PASSENGER:If the agreement is for a service of transportation to be provided by the agency, the payment would attract tax deduction under Section 194C (the definition of the term ‘work’ includes inter alia carriage of goods and passengers by any mode of transport). like if there is agreement to provide transportation to employees from home to office and back attracts 194-C.