TDS Tour Operator

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Abhishek Gupta (Querist)
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13 May 2010 I want to know the payments on which tour operator/ travel agent is required to deduct TDS specially in relation to the same business

Aditya Maheshwari

Aditya Maheshwari (Expert)
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13 May 2010 Payments to airlines/travel agents - The provisions of section 194C do not apply to the payments made to the airlines or the travel agents for purchase of tickets for air travel of individuals. The provisions shall however apply when payments are made for chartering an aircraft for carriage of passengers or goods. This clarification will apply mutatis mutandis to the tickets for travel of individual by any other mode of transport also—Circular : No. 713, dated 2-8-1995.

The payments made to a travel agent or an airline for purchase of a ticket for travel would not be subjected to tax deduction at source as the privity of the contract is between the individual passenger and the airline/travel agent, notwithstanding the fact that the payment is made by an entity mentioned in section 194C(1). The provisions of section 194C shall however apply when a plane or a bus or any other mode of transport is chartered by one of the entities mentioned in section 194C—Circular : No. 715, dated 8-8-1995.

taxindiaconnect

taxindiaconnect (Expert)
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13 May 2010 Agreed with Aditya

Abhishek Gupta

Abhishek Gupta (Querist)
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14 May 2010 Aditya I want to know the payments on which Tour operator is liabe to deduct TDS such as Payment to guides, Car/Taxi Hiring & other etc and under which section at what rate they are liable

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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28 July 2025 Great question! Here’s the clarity on **TDS obligations for Tour Operators on payments they make:**

### 1. **Payments made by Tour Operators to Guides, Car/Taxi Hiring, and Others**

* **Guides:**
Payments to local guides are generally treated as **professional fees** or **contractual services**.

* TDS is deducted **under Section 194J (Fees for Professional or Technical Services)**
* Rate: **10%**

* **Car/Taxi Hiring:**
Payments to transport contractors (like car or taxi operators) are covered under **Section 194C (Payment to Contractors/Sub-contractors)**.

* TDS is deducted **under Section 194C**
* Rate: **1% for individual/HUF contractors and 2% for others** (subject to conditions)

* **Other Services (like hotel bookings, event management, etc.):**
Depends on nature of services:

* If contractual, **Section 194C** applies
* If professional/technical services, **Section 194J** applies

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### 2. **Payments on which Tour Operator is NOT required to deduct TDS**

* **Payments for purchase of air/train/bus tickets:**
As per **CBDT Circular No. 713 and 715**, payments for regular purchase of tickets to airlines/travel agents **do not attract TDS under Section 194C**.
However, if the tour operator **charters** an aircraft or bus (i.e., hires the whole vehicle), then Section 194C applies.

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### 3. **Summary Table**

| Type of Payment | Applicable Section | Rate (%) | Remarks |
| ------------------------------------------- | ------------------ | -------------------------------- | -------------------------------------------- |
| Payments to Guides | 194J | 10% | Professional fees |
| Car/Taxi Hiring | 194C | 1% (individual/HUF), 2% (others) | Contractual payment to transport contractors |
| Payments for Chartering Bus/Aircraft | 194C | 1% or 2% | Contractual payment |
| Purchase of Regular Tickets (air/train/bus) | No TDS | - | Not subject to TDS |

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If you want, I can help you draft a checklist or sample TDS entries for your tour operator business. Would that be useful?

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