Tds on payment to transporters

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Sourabh Somani

Sourabh Somani (Querist)
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28 June 2015 please confirm whether a proprietorship firm also needs to deduct TDS on payment to transporters?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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28 June 2015 A Proprietorship firm i.e., an Individual is required to deduct TDS only if the turnover or professional receipt exceeds sum of Rs. 100 lakh or Rs. 25 lakh respectively in previous year, he is required to deduct tax at source. Example: Tax Audit is applicable in FY 2013-14 so TDS required to be deducted from FY 2014-15.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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28 June 2015 Payments to transporters attract Section 194C.

Earlier if transporter provided their PAN, TDS was not required to be deducted.

Now there is an amendment in the provisions of section 194C of the Act to expressly provide that the relaxation from non-deduction of tax shall only be applicable to the payment in the nature of transport charges (whether paid by a person engaged in the business of transport or otherwise) made to an contractor who is engaged in the business of transport i.e. plying, hiring or leasing goods carriage and who is eligible to compute income as per the provisions of section 44AE of the Act (i.e. a person who is not owning more than 10 goods carriage at any time during the previous year) and who has also furnished a declaration to this effect along with his PAN.

This amendment is applicable from June 1, 2015.

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