RE:TDS

This query is : Resolved

gurru (Querist)
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22 January 2010 we are C&F agent of petroleum company.we hire transporters to carry goods of petroleum company.we have made payment of RS 60000 to a single transporter in this financial year.i want to know whether we have to deduct tds on RS 10000 or whole amount of RS 60000.

KRISHNA KUMAR R C

KRISHNA KUMAR R C (Expert)
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22 January 2010 You have to deduct on whole amount of Rs.60,000/-

gurru

gurru (Querist)
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22 January 2010 WE HAVE NOT MADE SINGLE PYT TO TRANSPORTER.WE HAVE MADE MONTHLY PAYMENTS OF RS 15000.WILL TDS WILL STILL BE DUCTED ON WHOLE AMOUNT OF RS 60000

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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20 July 2025 Got it! You are a C&F agent of a petroleum company, and you hire transporters to carry goods. In the current financial year, you have paid a total of ₹60,000 to a single transporter, but these payments were made monthly in installments of ₹15,000 each. You want to know whether TDS (Tax Deducted at Source) must be deducted on just ₹10,000 or on the entire ₹60,000, given that no single payment exceeded ₹10,000.

Explanation:
TDS on transporters is typically governed under Section 194C of the Income Tax Act (payment to contractors and transporters).

According to Section 194C, TDS must be deducted if the sum paid or likely to be paid during the financial year exceeds ₹30,000 (in some cases ₹1,00,000, but that is for other contractors). For transporters, the limit is ₹30,000.
Threshold for single payment: There is a threshold of ₹10,000 for a single payment to a transporter. If any single payment exceeds ₹10,000, TDS must be deducted.
However, if payments are split into smaller amounts intentionally to avoid TDS, then tax authorities may still treat the total amount as a single contract and require TDS on the entire amount.
In your case:
You have paid ₹60,000 to a single transporter during the financial year.
Each monthly payment was ₹15,000, which is more than ₹10,000 per payment.
Since the single payment exceeds ₹10,000, you are required to deduct TDS on each payment at the applicable rate.
So, you must deduct TDS on the entire amount of ₹60,000, i.e., TDS on each ₹15,000 payment.

Summary:
TDS should not be deducted only on ₹10,000.
Since each payment is ₹15,000 (which is above ₹10,000), TDS is applicable on each payment.
The total amount paid in the year is ₹60,000, so TDS should be deducted on the entire amount.

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