Payment of rent on hiring of truck covered under 194c or 194

Dear Friend,

Firstly, Section 194I is not applicable to rent paid for trucks taken on hire.

This is so because rent for the purpose of Section 194I is read as under:

“Rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,—

(a) Land; or

(b) Building (including factory building); or

(d) Machinery; or

(e) Plant; or

(f) Equipment; or

(g) Furniture; or

(h) Fittings,

Whether or not any or all of the above are owned by the payee

Trucks do not fall in the above definition.

Section 194C is as follows –

Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to—

(a) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;

(b) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family

However, No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum.