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TDS

Nitesh (Chartered Accountant) (340 Points)

09 August 2007

just tell me what is the correct rate of TDS in the following matter:

A crane is taken for few days in a month on per day basis rate. there is no specific contract or arrangement with the concern who gives crane on hire. it is not specific that a crane would be taken on hire every month form the same person. a

as per one of my collegue TDS is to be done u/s. 194 I- Rent but as per me it is govern by 194 C - Contractor. please tell me your opinion on this matter as soon as possible

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12 Replies

(Guest)

hi, i would like to reply this query regarding the TDS on hiring of crains.

(Guest)

Hi Nitesh, I appreciate ur keen interest in the taxation issues. See there can be two situation as i am narrating below: SITUATION I:THERE IS MERE HIRING OF CRAINS:: In such an event section 194I would apply and tax would be deducted @ 10% w.e.f. 1.6.2007. SITUATION II: THE CRAIN LESSOR HIMSELF IS CARRYING OUT THE OPERATIONS:: In such an event sec 194C would apply as you are paying the lessor towards carrying out the operations involving usage of crains. Here it would not be out of place to mention that it does not matter you are paying them on per day basis. Even if you pay on per day basis then also 194C would,only, apply.

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 10 August 2007

Please note the following explanation in section 194I Explanation.—For the purposes of this section,— 52 [(i) “rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,— (a) land; or (b) building (including factory building); or (c) land appurtenant to a building (including factory building); or ______________________________________ (d) machinery; or (e) plant; or (f) equipment; or ______________________________________ (g) furniture; or (h) fittings, whether or not any or all of the above are owned by the payee;]

Nitesh (Chartered Accountant) (340 Points)
Replied 10 August 2007

Mr. Sampat lool I Know the explanation which is given, i have already went through that explanation before i had posted my query and the solution is not always drawn from legal words words which you had pasted in reply.

dhaval (Accoutant) (36 Points)
Replied 16 August 2007

i want to learn tds rules w.e.f 01/06/2007

dhaval (Accoutant) (36 Points)
Replied 16 August 2007

i wnt to learn some tds rate that effect 01/06/2007 so i can work properly

tushar jain (Service) (107 Points)
Replied 16 August 2007

TDS will be deducted under section 194I

Amit Sharma (article) (2677 Points)
Replied 24 December 2007

Deducted under 194I

(Guest)

Circular for 194I Amendments w.e.f 01.06.2007

(Guest)

dear Nitesh, i would like to say that, as you are quoted that A crane is taken on hire, your wording suggest that here the crane is used randomly on need basis, with out entering into any specific aggrement either to get it on rent or take it on the basis of written contract,

so in my openion it is very clear from the given circumstances that it is a clear cut case of contract ( two persons are shaking hands as per the requirment of work as and when arise), and accordingly the TDS should be deducted U/s 194 (c).

it is also the safe side as the basic limit U/s 194 (i) is 120000.00, which might not reach and accordingly you may not deduct the tds,

as against the thershold limit U/s 194 (c) which is only Rs 2500.00.