TDS of Freight

This query is : Resolved

Nitesh Sethiya (Querist)
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08 September 2009 Dear ALL,

Happy Greeting of the day!

During the period from 1st April 2008 to 31st MArch 2009 I have paid about 8.00 Lacs amount as a freight on raw material purchase to singal party and no tds has been deducted.

During whole period raw material was came by this two truck only and paid freight 8.00 Lacs but I have not deducted any TDS on this freight amount.

Tell me what should I do for saving disallowance of such freight amount?

Pls tell ASAp........
Bye

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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08 September 2009 CHECK OUT IF YOU CAN COVER YOUR CASE IN THE FOLLOWING PROVISO TO SECTION 194C

Provided further that no deduction shall be made under sub-section (2), from the amount of any sum credited or paid or likely to be credited or paid during the previous year to the account of the sub-contractor during the course of business of plying, hiring or leasing goods carriages, on production of a declaration to the person concerned paying or crediting such sum, in the prescribed form and verified in the prescribed manner and within such time as may be prescribed, if such sub-contractor is an individual who has not owned more than two goods carriages at any time during the previous year:

Provided also that the person responsible for paying any sum as aforesaid to the sub-contractor referred to in the second proviso shall furnish to the prescribed income-tax authority or the person authorised by it such particulars as may be prescribed in such form and within such time as may be prescribed; or

Nitesh Sethiya

Nitesh Sethiya (Querist)
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08 September 2009 any more clerification

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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27 July 2025 Hey! Here’s what you need to know about **TDS on Freight** payments:

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### 1. **Is TDS applicable on Freight charges?**

* **Yes**, under Section **194C** (Payment to Contractors), TDS applies on freight charges paid to a transporter or contractor.
* Freight payments for transportation of goods are covered under this section.

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### 2. **What is the TDS rate?**

* For **individuals/HUF** transporters: 1% (if PAN is available, else 20%)
* For **other entities** (companies, firms): 2% (if PAN is available, else 20%)

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### 3. **What to do since you didn’t deduct TDS for FY 2008-09?**

* You should deposit the **TDS amount from your own funds** immediately along with **interest** for late deduction under **Section 201(1A)**.
* File the TDS return for the relevant period with proper correction.
* Inform the transporter about TDS deposited (even if not deducted) and issue Form 16A for their records.

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### 4. **What about disallowance?**

* Section **40(a)(ia)** disallows payment if TDS is not deducted or deposited.
* However, if you deposit the TDS along with interest now, you can avoid disallowance.
* Maintain proper documents to show the TDS was deposited late but paid.

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### **Summary of your action plan:**

| Step | Action |
| ---------------------- | ---------------------------------------------------------- |
| Calculate TDS | 2% of Rs. 8,00,000 = Rs. 16,000 (if party is company/firm) |
| Deposit TDS + Interest | Pay TDS along with interest for late deduction |
| File TDS Return | Submit TDS return for the relevant period |
| Issue TDS Certificate | Provide Form 16A to the transporter |

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If you want, I can help you calculate interest for late TDS deposit or draft the TDS deposit challan details. Need that?

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