Payment in excess of 35000

1716 views 6 replies

There is a firm M/s. ABC. ABC uses the services of M/s. XYZ truck union (It is a union of Lorry drivers in that particular area. XYZ has PAN and Service tax Number) to transport its goods. The ABC makes payment directly to the drivers, the aggregate of which exceeds Rs. 35,000/- per day. The payment to single driver does not exceed 15,000/- per day. However, the bill is issued by the XYZ Truck union.

Now my question is:

  1. Whether the provisions of Sec 40A (3) relating to cash payments in excess of specified limit are attracted?
  2. Whether the Provisions of Sec 194 C relating to TDS are attracted?
Replies (6)

you have two options in hand

1) obtain pan of every driver and book against each driver seperately , without taking union in picture

2) use the pan of union, but dont exceed limit of 35000 cash per day.

The problem is drivers will not give any bill. the no.of drivers are in thousands. it is not possible to maintain individual records. and it exceeds 35000 per day

sec 40A can not be avoided if payment is in exceeding 35000 per day in cash.

when the PAN is available TDS is not applicable, but limiting cash under 35000 is better option, or pay by banking channel only.

Hi Morning

As per Mr Satish , paymnet to single Driver does not exceed 15000, Sec 40A attract when payment of 35000 is done to single person.

Second thing , And per My knowledge - driver does not releate to TDS Deduction  so PAN of organisation should be considered. since bill is issued from organisation not by driver.

 

Mr. satish it is better to guide them to make payment to xyz instead of making to drivers as bill is received from xyz

moreover transport which provide pan need not deduct tds as per sec 194C

 

Hope ur clarified if any further revert to me back

Dear Mr Arjun

Are you sure on the below.

"transport which provide pan need not deduct tds as per sec 194C"

 

 

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