TDS on freight

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Mittal (Querist)
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22 January 2008 Sir/ madam,
Every person (other than indvidual/huf) paying freight are required to deduct TDS.

My querry is as follows:
(i) The company is paying regularly freight to Truck driver directly in cash below Rs. 20000 in each case.
(ii)And Trucks are being send by same transporter (say, Delhi Bombay Transport) in every case. But the Truck no. is different in every case and payment is below Rs 20000.
Is the company required to deduct TDS on Freight payment.

Thanks & Regards

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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23 January 2008 It is the contract which is the criterion and not the truck number.

Similarly even if the payment is less than twenty thousand in individual cases it is the contract which is the criterion and if the aggregate payment of bills under a contract is more than the prescribed amount liability to deduct tax at source will arise.

Lastly, see the prvisos given under subsection (3) to section 194C for monetary limits for aggregation and cases for exemption for transporters.

Sathish k

Sathish k (Expert)
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23 January 2008 as per Section 194C even though you are making payments below Rs 20000/- in each case but it exceeds the amount specified under this section i.e. rs 50000/- p.a. paid to such a contractor. In your case the bills raised is by the same transporter (say Bombay Delhi Transporter) and payment received by the drivers in cash on behalf of the transporter.

so you need to deduct Tax at the rates specified.

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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13 November 2008 answered perfectly

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