05 June 2007
No. Section 194C deals with Works Contracts and section deals with rent for land/buildings. Car hire charges neither comes in the definition of works contracts nor in land/buildings.
05 June 2007
well as far as i know 194I also deals with rent on machineries and what i want to know is that will cars taken on hire will fall under the definition of machineries. If not then this will obviously attract 194C as there exists a contact between the two parties. I also feel that cars will fall under the defn of machines correct me if i am wrong
08 June 2007
As per the explanation to section 194 I - "(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 any land or any building (including factory building), together with furniture, fittings and the land appurtenant thereto, whether or not such building is owned by the payee" ... as such car hire charges doesnot attract section 194 I for sure. ... Sec 194 C deals only with works contract and as such care hire charges dosnot fit in there also. ... Thus 194 I & C would not be attracted
08 June 2007
i hate to disagree, but the definition given by Mr. Amit has been substituted by the taxation laws (amendment) act, 2006 w.e.f 13.07.06.The new definition of rent also includes machineries, plant and equipment. Moreover w.e.f 01.06.07 the TDS rate is be 10% irrespective of the nature of the payee. Correct me if i am wrong
09 June 2007
Mr. Abhishek, you are absoultly right about TDS rate & Defination. but the main matter is car taken on hire can be included in the defination of Machineries.
10 June 2007
if we reffer to singhanias ready reckoner, para 48.3 which talks about block of assets, sec 2(11) we will see that cars used in the bussiness of running them on hire will fall under Plant and Machinery Block 7
10 June 2007
Mr abhisek u r 100% in correct position Sec. 194 I would attract on hiring of car i.e. car is trated as machinery because car is the combinition of mechanical part.
07 September 2007
Mr. Abhishek I read your query i thought that if the car is hired on full mode like the driver & all is maintance is paid by us then we deduct the TDS as Rent rate (194I) but when we hire car & the driver is also given by car owner & maintance is alo paid by him he is only received one payment from us then this is a contract case and we deduct the TDS as contract rate (194 C ) so please chk this
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