What is the TDS Rate?

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Praveeri (Querist)
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15 May 2009 Dear Experts,

Pls clear my doubt

1. Taxi hire charges paid to a Ltd Co, (one time) Exceeds Rs.20000.00 is it liable for TDS Deduction?

2.Technical service charge paid to "X Retail Managements". Cheque also issued to the same favour. PAN no given by the vendor belongs to Person Status. Now Pls tell me whether I have to deduct Surcharge also by treating as Judicial person or should not I deduct surcharge considering as Individual.

Thanks in advance.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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15 May 2009 1. yes, liable for TDS u/s 194C.

2. No need to deduct surcharge.

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Praveeri

Praveeri (Querist)
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15 May 2009 Thank you sir,

Pls explain me in which cases we have to deduct surcharge (with possible explanation pls).

Thanks in advance.

jegannath G

jegannath G (Expert)
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15 May 2009 if it exceed Rs 10000000

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Praveeri

Praveeri (Querist)
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15 May 2009 HI,

But I have asked for Judicial person category. Can you explanin the circumstances on which we will deduct surcharge. (for Judicial person there is no exemption limit).

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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03 August 2025 Here’s a clear explanation on **TDS rates and surcharge deduction** based on your questions:

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### 1. **Taxi hire charges paid to a Ltd Co exceeding Rs. 20,000**

* Taxi hire charges fall under **Contractual payments** or **Transport charges**.
* **TDS is deductible under Section 194C** (Payments to contractors).
* If payment to a contractor (here, Ltd Co.) exceeds **Rs. 30,000 in a single payment** or **Rs. 1,00,000 in aggregate in a financial year**, then TDS @1% (for individual/HUF) or 2% (for others) is to be deducted.
* However, since this is a **one-time payment exceeding Rs.20,000**, technically, TDS is not applicable unless it exceeds the threshold mentioned above.
* But often, for company vendors, TDS at 2% under 194C is deducted if the total exceeds Rs.30,000.

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### 2. **Technical service charges paid to “X Retail Managements”**

* This payment falls under **Section 194J** (TDS on fees for professional or technical services).
* The rate of TDS under 194J is **10%** (as per old rates; may vary depending on current laws).
* You mentioned the PAN given belongs to a **Person status (individual or HUF)**.
* So, you deduct TDS at the applicable rate (10%) but **no surcharge or cess is deducted separately from TDS**.
* The surcharge is applicable when **calculating total income tax payable by the deductee**, not on TDS deduction at source.

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### 3. **When to deduct surcharge?**

* **Surcharge** is an additional tax on the total income tax liability of a taxpayer whose income exceeds specified limits.
* It **does not affect TDS rates directly**.
* You do **not deduct surcharge separately while deducting TDS**.
* The deductee (recipient) calculates surcharge while filing the income tax return.
* **Judicial person (company or firm):** no exemption limit for surcharge; surcharge applies if income exceeds threshold (e.g., Rs 1 crore for companies).
* For **individuals and others**, surcharge applies if income exceeds specified limits (e.g., Rs 50 lakh or Rs 1 crore).

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### Summary:

| Scenario | TDS Applicable? | TDS Rate | Surcharge Deduction? |
| -------------------------------------- | ---------------------------------- | -------------- | ------------------------------------- |
| Taxi hire charges > Rs 20,000 (Ltd Co) | Yes (if > Rs 30,000) | 2% under 194C | No (Surcharge not deducted at source) |
| Technical service charges | Yes | 10% under 194J | No |
| Surcharge deduction by deductor | No (Deductee calculates surcharge) | N/A | N/A |

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