tds on dress material hire on rent
This query is : Resolved
21 March 2009
which rate of Tds considered if Dress material hired (For TV serials & Other like purpose) ? Whether On contractor basis or rent Basis? could any referance like case study be available for this?
21 March 2009
Contract u/s 194C.
22 March 2009
If it is on contract basis, apply 194C
23 March 2009
could any referance like case study be available for this?
27 July 2025
When it comes to the TDS implications on **hiring dress material** for TV serials or similar purposes, the **correct section** of the Income Tax Act and the **rate of TDS** depend on the specific nature of the transaction, i.e., whether it is a **contract** or **rent** arrangement.
### **1. TDS on Hiring Dress Material:**
* If the **dress material is hired** as part of a **contract arrangement**, where the hire is being done for a specific purpose (like a TV serial, event, or production), the **TDS** will likely be governed under **Section 194C** (for contracts).
* **Section 194C** deals with **payments to contractors** and **sub-contractors** for work (including contracts for the supply of goods or services). If the agreement involves hiring dress material on a contract basis (i.e., for a specific period or project), then the TDS deduction will apply under **Section 194C**.
* The **TDS rate under Section 194C** is generally **1%** for individuals/HUF and **2%** for other entities, based on the payment amount.
* If the **dress material is hired on a rent basis**, and the agreement clearly states that the material is being provided for **rent** (without a specific contract to supply services), then **Section 194-I** (TDS on Rent) may apply.
* **Section 194-I** deals with TDS on **rent payments**, and the rate of TDS depends on the type of property being rented. For rent on **movable property**, like dress material, the TDS rate is **10%**.
### **2. TDS Application (Contract vs. Rent)**
* **If it's a Contract (Section 194C)**:
* If you're hiring dress material under a **contract arrangement** where the supplier is also providing some service (e.g., delivering the material, providing it for specific use), then **Section 194C** would be applicable.
* In this case, the **TDS rate is 1%** for individuals and HUFs, and **2%** for others.
* **If it's Rent (Section 194-I)**:
* If you're hiring the dress material purely as **rent** (no additional services are being provided), then **Section 194-I** would apply, and the **TDS rate is 10%** on the rental payments.
### **3. Case Study Example:**
* **Scenario 1**: A **TV production company** hires dress material from a vendor for use in an upcoming serial. The vendor delivers the material for a fixed period (e.g., 3 months) and is not responsible for any additional services (like washing, maintenance, or styling).
* **TDS Applicability**: The agreement is **purely rental** in nature (i.e., you’re paying for the use of the material, not a service), so **TDS should be deducted under Section 194-I** at the **rate of 10%**.
* **Scenario 2**: A **TV production company** hires dress material from a vendor, and the vendor not only provides the material but also provides additional services, like **altering** the dresses, **designing** them for specific scenes, or **delivering** the material to the studio.
* **TDS Applicability**: This arrangement would be considered a **contract**, and **TDS should be deducted under Section 194C** at **1%** (if the recipient is an individual/HUF) or **2%** (for others).
### **4. Important Considerations**:
* **Agreement Terms**: The exact terms of the agreement should be reviewed to determine whether it's a **contract for supply and service** or **rent for usage**.
* **Invoice Structure**: If the invoice mentions both the supply of goods and services, it's likely to fall under **Section 194C**. If it only mentions the rental of material, it's likely to fall under **Section 194-I**.
### **5. Reference or Case Law:**
Unfortunately, there may not be a direct "case study" available for dress material hire specifically, but here are key points from similar TDS scenarios:
* **Service vs. Rent distinction**: Courts have often held that **renting** is a different nature of transaction than **contractual supply** where services are rendered.
* The courts have also ruled that if services are part of the supply, the transaction may fall under **Section 194C** instead of **Section 194-I**.
---
### **Conclusion:**
* **TDS under Section 194C** should be deducted if the dress material is provided **as part of a contract** (including services like delivery, alteration, or design).
* **TDS under Section 194-I** should be deducted if the dress material is rented **without any additional services** (pure rent).
If you still have any doubts about the classification of the transaction, I'd recommend consulting with a tax professional to ensure you're applying the correct section and TDS rate based on the specifics of the agreement.
### **1. TDS on Hiring Dress Material:**
* If the **dress material is hired** as part of a **contract arrangement**, where the hire is being done for a specific purpose (like a TV serial, event, or production), the **TDS** will likely be governed under **Section 194C** (for contracts).
* **Section 194C** deals with **payments to contractors** and **sub-contractors** for work (including contracts for the supply of goods or services). If the agreement involves hiring dress material on a contract basis (i.e., for a specific period or project), then the TDS deduction will apply under **Section 194C**.
* The **TDS rate under Section 194C** is generally **1%** for individuals/HUF and **2%** for other entities, based on the payment amount.
* If the **dress material is hired on a rent basis**, and the agreement clearly states that the material is being provided for **rent** (without a specific contract to supply services), then **Section 194-I** (TDS on Rent) may apply.
* **Section 194-I** deals with TDS on **rent payments**, and the rate of TDS depends on the type of property being rented. For rent on **movable property**, like dress material, the TDS rate is **10%**.
### **2. TDS Application (Contract vs. Rent)**
* **If it's a Contract (Section 194C)**:
* If you're hiring dress material under a **contract arrangement** where the supplier is also providing some service (e.g., delivering the material, providing it for specific use), then **Section 194C** would be applicable.
* In this case, the **TDS rate is 1%** for individuals and HUFs, and **2%** for others.
* **If it's Rent (Section 194-I)**:
* If you're hiring the dress material purely as **rent** (no additional services are being provided), then **Section 194-I** would apply, and the **TDS rate is 10%** on the rental payments.
### **3. Case Study Example:**
* **Scenario 1**: A **TV production company** hires dress material from a vendor for use in an upcoming serial. The vendor delivers the material for a fixed period (e.g., 3 months) and is not responsible for any additional services (like washing, maintenance, or styling).
* **TDS Applicability**: The agreement is **purely rental** in nature (i.e., you’re paying for the use of the material, not a service), so **TDS should be deducted under Section 194-I** at the **rate of 10%**.
* **Scenario 2**: A **TV production company** hires dress material from a vendor, and the vendor not only provides the material but also provides additional services, like **altering** the dresses, **designing** them for specific scenes, or **delivering** the material to the studio.
* **TDS Applicability**: This arrangement would be considered a **contract**, and **TDS should be deducted under Section 194C** at **1%** (if the recipient is an individual/HUF) or **2%** (for others).
### **4. Important Considerations**:
* **Agreement Terms**: The exact terms of the agreement should be reviewed to determine whether it's a **contract for supply and service** or **rent for usage**.
* **Invoice Structure**: If the invoice mentions both the supply of goods and services, it's likely to fall under **Section 194C**. If it only mentions the rental of material, it's likely to fall under **Section 194-I**.
### **5. Reference or Case Law:**
Unfortunately, there may not be a direct "case study" available for dress material hire specifically, but here are key points from similar TDS scenarios:
* **Service vs. Rent distinction**: Courts have often held that **renting** is a different nature of transaction than **contractual supply** where services are rendered.
* The courts have also ruled that if services are part of the supply, the transaction may fall under **Section 194C** instead of **Section 194-I**.
---
### **Conclusion:**
* **TDS under Section 194C** should be deducted if the dress material is provided **as part of a contract** (including services like delivery, alteration, or design).
* **TDS under Section 194-I** should be deducted if the dress material is rented **without any additional services** (pure rent).
If you still have any doubts about the classification of the transaction, I'd recommend consulting with a tax professional to ensure you're applying the correct section and TDS rate based on the specifics of the agreement.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Money lost in stock market related scam
- Reminder of Dues under the WBGST Act 17
- ERRROR IN ITR2 FILING
- ITR3
- 80ccd(2) deduction
- ITR2 Not Validating Short Term Capital Loss as value less than zero
- Rebate u/sec. 87A manually
- GSTR ITC relationship
- Hash value error indicated whilst validating itr 2 online
- FNO loss set off with STCG
- Regarding Hackathon Prize W-8BEN Form Tax Treaty Benefit & 115BB/115BBJ
- Excess Interest paid on TDS challan- Can it adjusted against tax payable
- RECEIPT NUMBER OF EARLIER STATEMENT FILED FOR FORM 26Q- PREVIOUS TDS RETURN FILED FOR F.Y.2017-18_Q4
- Regarding ITC show in Electronic Credit Reversal and Re-claimed Statement.
- TDS on disallowance and reporting
- Requirement of MGT-14 for resolution passed at EGM for appointment of auditor
- ICWAI-Final
- Gratuity Fund Audit & ITR
- RCM gst liability and return query
- HSN details in Table 12 for gstr1
Trending Online Classes
-
Input Tax Credit, GST refunds and Recovery of refunds- Roadblocks and way outs
CA Nipun Arora03 September 2025 -
GST LIVE Certification Course - 43rd Weekdays Batch(With Govt Certificate)
Industry Expert15 September 2025
CAclubindia
