Tds under 194 c or 194 i under this case is deducted
This query is : Resolved
02 October 2012
sir,
suppose a client x (pvt ltd co.) is providing trucks on rent basis by making contract of 3 years with a company y(pvt ltd co), now
1-whether y co while making payment of rent every month will deduct tds of x co under section 194 c @ 2% or
2-whether y co will deduct tds of x co under section 194 i @10%
whether contract or rent which basis?
also does section 194 I covers all types of ,rents, or it has some limitation if any reference of case law can be provided it will be great help
suppose a client x (pvt ltd co.) is providing trucks on rent basis by making contract of 3 years with a company y(pvt ltd co), now
1-whether y co while making payment of rent every month will deduct tds of x co under section 194 c @ 2% or
2-whether y co will deduct tds of x co under section 194 i @10%
whether contract or rent which basis?
also does section 194 I covers all types of ,rents, or it has some limitation if any reference of case law can be provided it will be great help
03 October 2012
IN the given case , the contract is for the renting of the trucks and hence the provisions of sec. 194 I will get attracted. Applicable TDS rate is 2%.
Explanation to Sec. 194 I provides that besides on land & building , tax shall be deductible for leasing or hiring of machinery, plat, equipment, furniture & fittings whether or not owned by the payee.
Explanation to Sec. 194 I provides that besides on land & building , tax shall be deductible for leasing or hiring of machinery, plat, equipment, furniture & fittings whether or not owned by the payee.
03 October 2012
Agreed with Mr. Talathi as this is rent agreement.
05 October 2012
but sir provision of 194 i covers only two types of rents
one is rent of plant & machinary
second is of building & furniture etc
for both of above rates are also fixed in 194 i does it not prove that section is not applicable to any other cases than above two
it is only applicable to p&m or building & furniture
for p& m rate is 2 %
for building & furniture rate is 10%
one is rent of plant & machinary
second is of building & furniture etc
for both of above rates are also fixed in 194 i does it not prove that section is not applicable to any other cases than above two
it is only applicable to p&m or building & furniture
for p& m rate is 2 %
for building & furniture rate is 10%
05 October 2012
in this case item is trucks which is not covered by any of two above
06 October 2012
Under the Income Tax Act, vide sec. 2(11) all assets are grouped in the Blocks.
All eligbile assets are classified into five classes :
(1) Building
(2) Furniture
(3) Plant & Machinery
(4) Ships
(5) intangible assets
Block of Plant & Machinery covers
Motor Cars, motor Buses, Commercial Vehicle etc.
Thus, by implication for the purpose of TDS u/s 194 I Vehicles is to be categorised under the head Plant & Machinery.
All eligbile assets are classified into five classes :
(1) Building
(2) Furniture
(3) Plant & Machinery
(4) Ships
(5) intangible assets
Block of Plant & Machinery covers
Motor Cars, motor Buses, Commercial Vehicle etc.
Thus, by implication for the purpose of TDS u/s 194 I Vehicles is to be categorised under the head Plant & Machinery.
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06 October 2012
Truck is covered under plant as explained by Mr. Talti, TDS will be applicable @2% u/s. 194I.
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