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Sec 194H Tds

Akshay shah (18 Points)

15 July 2019  
A company whose employees or directors whenever required to travel whether by train or air, the tickets were booked by the specific or fixed agent who raises the invoice against the travel booking by charging ticket amount with the commission (Seperately shown in invoice). Are they liable to deduct Tds? If yes under which section?

 4 Replies

chandusammitty (cma student) (97 Points)
Replied 15 July 2019

yes he is deducted

A B Kundu (Professional) (1417 Points)
Replied 15 July 2019

In my opinion, the extra amount, over & above the price of the tickets, the company is paying to that agent is to be treated as Professional Charges claimed by the agent for booking the tickets on behalf of the company, it should not be treated as Commission. Hence, TDS U/s 194J is to be applied.

Akshay shah (18 Points)
Replied 15 July 2019

Hometds calculatorairline ticket booking tds

TDS ON PAYMENT TO TRAVEL AGENT FOR AIR LINE TICKETS

 1  RAJ KUMARI  Saturday, September 13, 2008

 TDS ON TRANSPORTER-GOODS CARRIAGE MEANS ? BUDGET-18 SUGGESTION

 Oral contract covered under TDS section 194C

 TDS on C & F agents of Transporters: Implications of 194C(6)

 TDS on Big Transporters proposed to be levied wef 01.06.2015

 TDS ON PAYMENT TO CONTRACTOR SECTION 194C AT A GLANCE

query before us is
"whether tds should be deducted u/s 194C for payment made to travel agent for booking of airline tickets by a company for its employee(s)"?


The following general conditions should be satisfied for a payment to qualify for deduction of tax u/s 194C


1.Payee:The contract should be entered by the following specific person

Central government

state govt or Local authority

Cent or State Corp. covered estb. under Cent./state act

Any co-operative society

Any company

Any authority constituted In India under or b the law for town planning and other specific work as defined

any society

any Trust

any firm

any University with specific conditions

Societies register under the specific acts

any firm

any HUF?individual if turnover exceeding 40lacs or profession receipt exceeds 10lakh in immediate preceding year

from 01.06.2008 any AOP /BOI

2.payer

Resident contractor

payment to subcontractor by resident contractor

3.work

contract between payer and payee for "carrying out any work"

Including supply of labour for carrying out any work.

So in general three basic genral condition should be fulfilled to make a payment eligible for deduction of tax at source u/s 194C.if any one of three content/condition is missing ,then section 194C will not be applicable.


so where the contract is between contractor and Huf or individual for personal purpose it will not be covered under section 194C and tax will not be deductible.


In this case of payment to travel agent for booking of airline tickets ,the contract is between individual and airline company though payment is made by the company so tds is not deductible.


CBDT Clarificatary circulaor:


CBDT has issued a detailed circular no 715 on tds u/s 194C,194I and 194J dated 8.8.1995 ,In which 34 question has been dealt .In this circular question number 6 relates to payment made to travel agent/airline for booking of tickets ,It has been clarified in the circular that notwithstanding the payment has been made by the payee list mentioned as above ,but the contract of purchasing the ticket is between individual passenger and the airline/travel agent ,so tax should not be deducted.


the relevant part of the circular is reproduced here under for your ready reference


"Question 6 : Whether payment under a contract for carriage of goods or passengers by any mode of transport would include payment made to a travel agent for purchase of a ticket or payment made to a clearing and forwarding agent for carriage of goods ?

Answer : The payments made to a travel agent or an airline for purchase of a ticket for travel would not be subjected to tax deduction at source as the privity of the contract is between the individual passenger and the airline/travel agent, notwithstanding the fact that the payment is made by an entity mentioned in section 194C(1). The provision of section 194C shall, however, apply when a plane or a bus or any other mode of transport is chartered by one of the entities mentioned in section 194C of the Act. As regards payments made to clearing and forwarding agent for carriage of goods, the same shall be subjected to tax deduction at source under section 194C of the Act.


hence the No tax should be deducted u/s 194C on payment made to travel agent/airline for booking of tickets.This rule is also applicable on other transport medium like rail booking also.

subhagan sreerangam (6902 Points)
Replied 03 August 2019

good clarification and information

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