Tds applicability on payment made to air ticket agent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 October 2013 If a tour operator company buy air ticket from air ticket agent,then tds deduction will be applicable or not u/s 194C?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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04 October 2013 it should be covered under 194C, or for that matter under any other TDS section:

Refer to Question 6 in CBDT circular CBDT has issued a detailed circular no 715 dated 8.8.1995

"Question 6 : Whether payment under a contract for carriage of goods or passengers by any mode of transport would include payment made to a travel agent for purchase of a ticket or payment made to a clearing and forwarding agent for carriage of goods ? Answer : The payments made to a travel agent or an airline for purchase of a ticket for travel would not be subjected to tax deduction at source as the privity of the contract is between the individual passenger and the airline/travel agent, notwithstanding the fact that the payment is made by an entity mentioned in section 194C(1). The provision of section 194C shall, however, apply when a plane or a bus or any other mode of transport is chartered by one of the entities mentioned in section 194C of the Act. As regards payments made to clearing and forwarding agent for carriage of goods, the same shall be subjected to tax deduction at source under section 194C of the Act.

The air travel agent might be receiving commission from the airline company and there 194H should apply.

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