TDS ON GENERATOR HIRED BY BANK.

This query is : Resolved

AMIT (Querist)
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24 April 2008 A Bank has hired a Generator FOR TWO YEARS on the terms that the Bank will pay a fixed amount of Rs. 8200/- per month to the provider of Generator, and the provider will bear the cost of disel.
Whether it is covered under Section 194C or under any other Section of TDS?
Please Clarify Whther the Bank is Liable to Deduct TDS on This Payment?
Please reply on the following Address:
amitagarwal2008@rediffmail.com

CA Hemant T Dewani

CA Hemant T Dewani (Expert)
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24 April 2008 in my opnion you will give fixed assets for hiring so it is applicable u/s 194I rent and you also received rent from the bank and tds is not applicable because total grss receipt is less than rs.120000/ in the year
so bank is not liable to deduct tax on hiring of generator

R.V.RAO

R.V.RAO (Expert)
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24 April 2008 SEC 194-I,RENTING/HIRING OF EQUIPMENT IS ATTRACTED.BUT THE AMOUNT IS BELOW THE EXEMPTION LIMIT OF RS 120000/-P.A.HENCE NO TDS DEDUCTIBLE.
R.V.RAO

CA PRIKSHIT WADHWA

CA PRIKSHIT WADHWA (Expert)
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24 April 2008 AS THE BANK IS GIVING THE FIXED CONSIDERATION FOR USE OF GENERATOR AND THE DIESEL COST IS BORNE BY THE PROVIDER, IT IS NOT RENTING OF THE MACHINERY. IT IS AN CONTRACT AND HENCE SEC 194C WILL APPLY. IN RENTING OF MACHINERY, THE REPAIR AND MAINTENANCE IS OF BANK AND NOT OF OWNER.

O.D.SHARMA

O.D.SHARMA (Expert)
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25 April 2008 This is covered U/S 194C as ,This is a contract & maintanence will be of supplier.In my openion when rate is fixed for two years.TDS must be deducted in 94C

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