HI... In my opinion u should deduct as contractor u/s. 194c and for supporting it get the invoice changed as showing the invoice for particular work done specifying that work. It will never be feasible to deduct u/s. 194I in case of tractor owner, what he will earn if he is paying 10% directly. Its practical opinion what i've seen people doing in past. thanks.
It would be safe to deduct at a higher rate if there is no clarity whether it should be 194C or 194I. A lot of cases have come with the department and still clarification is needed.Since Rate if 194i which is 10% plus applicable surcharge if any + 3% cess is more than contact rate, it would be to charge at 194i rate.
194I Shall apply on this. Rent means any payment by whatever name called under any lease, sublease or any other agreement or arrangement for the use of any:
Payment of hire charges for using tractor is a payment for using any plant/equipment as specified u/s194 I . The point is to be considered whether the tractor was taken on hire ealier also and whether any TDS has been deducted by the payer of hire charges on such occasions u/s 194 C or not.If the payments had been made earlier invoking sec 194 C then the assesse should continue to deduct tax u/s 194 C. If this is the first occasion then the assesse should deduct tax u/s 194 I as because it is clearly falling within the ambit of sec 194 I.
If you are hiring tractor and paying on the basis of time used, you are hiring a machinaery and 194 I is applicable. However, if you are hiring a tractor and giving payment not on the basis of time, but on the basis of work done, 194C is applicable.
yaa its correct what he is saying Mr.rajesh kumar.
if you are enguaged tractor through an agreement like water supply,or intercarting,or transportation of materials etc...it wil effected by 194C if you or engaged hire charges for monthly basis or daily basis it will efeccted by 194I because it treated as Machinery.
Thank you,
Sekhar.
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