Tds for payment to transporation firm with pan card

This query is : Resolved

Summit Agarwal (Querist)
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23 April 2015 Dear,

We run a transportation firm(Individual)and does movement of goods through rail and road. Our turnover is more than 1 Cr. So do we fall under the Section 194C of Income Tax Act?

Is our clients liable to deduct TDS for the payment made to us? If yes, then how much?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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23 April 2015 As per the amended section 194C, through Finance Act (2) of 2009, No deduction shall be made from any payments made to a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his PAN to the deductor.

This new subsection 6 of 194-C makes such transport contractor to compulsorily provide PAN to the Deductor, failing to which TDS will be made by Deductor as per 194C.

Summit Agarwal

Summit Agarwal (Querist)
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23 April 2015 We are providing all the necessary documents including PAN Card. But, transactions per clients might greater than Rs.75,000/- per financial year. Also, we provide movement of goods through containers (railway).

So we still claim no deduction under this act?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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23 April 2015 This exemption may not be applicable to movement of goods through railway.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 April 2015 Sub section 6 of Section 194C is a specific provision. The limits of 30000-75000 have been prescribed under sub-section 5 are not applicable in the case of a transporter.
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Further the definition of "work" does not cover transportation by railway as per explanation (iv)(c) to Section 194C. So, your clients are not liable to deduct TDS.
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Summit Agarwal

Summit Agarwal (Querist)
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23 April 2015 Thank you. So if we do movement of good by rail, clients are not liable to deduct TDS.

But is it the same if do movement of goods through road?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 April 2015 Please refer reply given by eapert Shri Seetharaman.
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Summit Agarwal

Summit Agarwal (Querist)
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23 April 2015 Thank you so much for the guidance.

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