Tds on rent of trucks

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2011 i am a transporter and i hired trucks on fixed rent i.e, i will pay a fixed amount to a person owned trucks and i bear all other expenses which need to be spend i.e. diesel exp, reparing,driver's and conductor's salary, etc. my question is whether i should deduct tds on that rent or i cover under any section to deduct tds?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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23 December 2011 In the given case TDS needs to be deducted u/s 194I @ 2%.

Threshold limit Rs 180000/- p.a.

Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2011 if the rent is upto Rs.120000 and the case is for asst yr 2009-10 then also it will apply?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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23 December 2011 Threshold limit of180000/- p.a. is applicable from 01.07.2010.

For Financial Year 2009-10 limit was Rs.120000/- p.a.

If rent is upto120000/- p.a. TDS deduction not required and if more than Rs. 120000/- p.a. TDS required to be deducted on total amount.

Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2011 is there any case law regarding this?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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24 December 2011 First of all, Section 194I is not applicable to rent paid for trucks taken on hire.

This is so because rent for the purpose of Section 194I is defined as under:

“rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement 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

Trucks do not fall in the above definition.

Section 194C will be applicable in this case.

TDS will be deducted @ 1% if payment is made to an individual or HUF and 2% if made to any other person.

Limits: Single invoice exceeds Rs. 30,000/- or aggregate payments during the year exceed Rs. 75,000/-.

However, TDS is not required to be deducted if the truck supplier provides his PAN.

However, for AY 2009-10, the position is as under:

TDS to be deducted @ 2%.
Limits: Single invoice exceeds Rs. 20,000/- or aggregate payments during the year exceed Rs. 50,000/-

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