Tds u/s 194c
This query is : Resolved
19 February 2015
As per sec194C(6) payment made to transporters shall not be subject to tds. However circular no.715 dt.08.08.1995 says 'clearing and forwarding agents while making payments to a carrier of goods shall be liable to deduct tax. Isn't this contradictory?
Should CFA agents deduct tds while making payments to transporters?
Should CFA agents deduct tds while making payments to transporters?
19 February 2015
Circular 715 dated 8.8.1995 (question no.6 and 7) became REDUNDANT in view of the substituted section 194C(6) came into force from 1.10.2009.
19 February 2015
So,as per current provisions, C&F agents are liable to deduct Tds while making payment to transporters,right?
19 February 2015
So,as per current provisions, C&F agents are liable to deduct Tds while making payment to transporters,right?
19 February 2015
So,as per current provisions, C&F agents are liable to deduct Tds while making payment to transporters,right?
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02 August 2025
Let's clarify this once and for all.
---
## ✅ **Who is required to deduct TDS under Section 194C?**
Section **194C of the Income Tax Act** requires **any person responsible for paying** any sum to a resident **contractor** for carrying out any work (including transportation) to **deduct TDS**, **except** in certain exempt cases.
---
## ✅ **What does Section 194C(6) say (Post 1.10.2009)?**
From **1st October 2009** onward, **TDS is not required** on payments to a **transporter (contractor engaged in plying, hiring, or leasing goods carriages)** **if**:
1. The contractor **owns 10 or fewer goods carriages** at any time during the financial year, and
2. The contractor **provides a declaration** to that effect along with a **copy of PAN**.
---
## 🚫 So, is **Circular 715 (dated 8.8.1995)** still applicable?
**No.**
* Circular 715 was based on the **pre-2009 version** of Section 194C.
* That version **did not contain the exemption** for small transporters.
* After **1 October 2009**, the law changed, and the **exemption under 194C(6)** overrides older circulars.
Hence, **Circular 715 is redundant for transport payments post-1.10.2009**.
---
## 🤔 What about **C\&F (Clearing and Forwarding) agents**?
C\&F agents are **payers** of freight/transport charges to transporters. So:
### 🔹 If the transporter:
* **Owns ≤10 goods carriages**, and
* **Provides the PAN declaration under 194C(6)**
👉 **Then NO TDS is to be deducted** — **even by C\&F agents**.
### 🔹 If the transporter:
* **Owns >10 vehicles**, or
* **Fails to provide PAN/declaration**
👉 **Then TDS applies**, **regardless of who the payer is** — C\&F agent, company, individual, etc.
---
## ✅ Final Answer:
> **C\&F agents are NOT liable to deduct TDS under Section 194C** on freight/transport payments **if the transporter provides a valid declaration under Section 194C(6) and PAN**, irrespective of Circular 715, which is now **outdated** due to statutory amendment.
---
Let me know if you want a **sample of the declaration format** to obtain from the transporter.
---
## ✅ **Who is required to deduct TDS under Section 194C?**
Section **194C of the Income Tax Act** requires **any person responsible for paying** any sum to a resident **contractor** for carrying out any work (including transportation) to **deduct TDS**, **except** in certain exempt cases.
---
## ✅ **What does Section 194C(6) say (Post 1.10.2009)?**
From **1st October 2009** onward, **TDS is not required** on payments to a **transporter (contractor engaged in plying, hiring, or leasing goods carriages)** **if**:
1. The contractor **owns 10 or fewer goods carriages** at any time during the financial year, and
2. The contractor **provides a declaration** to that effect along with a **copy of PAN**.
---
## 🚫 So, is **Circular 715 (dated 8.8.1995)** still applicable?
**No.**
* Circular 715 was based on the **pre-2009 version** of Section 194C.
* That version **did not contain the exemption** for small transporters.
* After **1 October 2009**, the law changed, and the **exemption under 194C(6)** overrides older circulars.
Hence, **Circular 715 is redundant for transport payments post-1.10.2009**.
---
## 🤔 What about **C\&F (Clearing and Forwarding) agents**?
C\&F agents are **payers** of freight/transport charges to transporters. So:
### 🔹 If the transporter:
* **Owns ≤10 goods carriages**, and
* **Provides the PAN declaration under 194C(6)**
👉 **Then NO TDS is to be deducted** — **even by C\&F agents**.
### 🔹 If the transporter:
* **Owns >10 vehicles**, or
* **Fails to provide PAN/declaration**
👉 **Then TDS applies**, **regardless of who the payer is** — C\&F agent, company, individual, etc.
---
## ✅ Final Answer:
> **C\&F agents are NOT liable to deduct TDS under Section 194C** on freight/transport payments **if the transporter provides a valid declaration under Section 194C(6) and PAN**, irrespective of Circular 715, which is now **outdated** due to statutory amendment.
---
Let me know if you want a **sample of the declaration format** to obtain from the transporter.
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