Tds on car hire charges

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sagar kulkarni (Querist)
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15 December 2011 A Comapny is hiring cars as and when required for company employee or officers visiting purpose at various locations on a rent nd making a payment by dedcuting tax at source @ 2% u/s 194c where there is no direct contract for such renting of cars. Can i have clarification whether 194c or 194i is applicale to this kind of transaction.

Plz reply asap
thnx

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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16 December 2011 Although there is nor formal contract between the company and the service provider, it is safe to deduct TDS under Section 194C if the aggregate payments during the year exceed Rs. 75,000/-.

Further, Section 194I is not applicable to this case as Section 194I is applicable to payment of "RENT".

Section 194I defines rent as:

“rent” means any payment for the use of (either separately or together) any,—

(a) land; or

(b) building (including factory building); or

(c) land appurtenant to a building (including factory building); or

(d) machinery; or

(e) plant; or

(f) equipment; or

(g) furniture; or

(h) fittings,

whether or not any or all of the above are owned by the payee;]

It is clear from above that Section 194I is applicable to rent for use of building etc. and not car hire charges.

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sagar kulkarni

sagar kulkarni (Querist)
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16 December 2011 Thanks a lot Mr. Siddhartha

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