tds on vehicle hiring

TDS 4511 views 15 replies
i recently attended seminar on FBT & TDS . In this seminar lakhotia ji told that vehicle hiring also comes under the perview of tds _rent and 10% tds shall be deducted from the party .as per his advice we are deducting TDS on vehicle hiring @ 10% + 3% Cess. Now the party is objecting . They are claiming that only 2.06% tds should be deducted. kindly advice,
 
Replies (15)
Let us take an example. Coal India normaly outsource transportation job. The call it hiring of equipments for transportation. In essence it is a payment for carrying out work of transportation and is squarely covered under section 194C. On the other hand if Coal India hires the equipments on monthly rental basis, then 194I will be applicable. The nature of work/agreement between the parties, not the nomencalture will decide, whether 194C or 194I is attracted. It is to be seen in which context Lakhotiaji has opined that hiring of vehicle comes under 194I.
I would like to quote reply by one of our experts in response to similar query. "Mr. Abhishek I read your query i thought that if the car is hired on full mode like the driver & all is maintance is paid by us then we deduct the TDS as Rent rate (194I) but when we hire car & the driver is also given by car owner & maintance is alo paid by him he is only received one payment from us then this is a contract case and we deduct the TDS as contract rate (194 C ) so please chk this ok regards sachin kumar sharma"
but we are paying on monthly basis, not a fixed amount but only usage charges.what will be in this situation. shikha
we ask for a vehicle as per our requirement, it may be ac or ac as per the requirement. shikha
Can we deduct TDS On Vehicle on hire charges monthly basis , Please advice me @ which rate ,there is a contract between us .
Dear Mr. Joshi, Suppose you have taken a vehicle on rent for a consideration of Rs. 15000 a month. Then deduct TDS u/s 194I. Rate upto 31.05.07 = 15% There after = 10%
I think in the cases mentioned the decisive factor is whether the contract is a contract of work or the contract is for transfering the right to use the vehicle. It has been said that if no loading and unloading charges etc. are involved, hire charges paid to truck owner does not fall under the ambit of section 194C. The question is that, who is using the vehicle, If the Contractor is using the same in executing the works contract 194C should be applicable and if the contractee is using the vehicle for business use section 194I should be appliable.
asasasasas
we ask for vehicle as and when required . There is not an agrrement for a fixed amount per month.
194I
IF THE AMOUNT OF PAYMENT IS LIKLEY TO BE LESS THEN 120000 THEN SECTION 194I WILL NOT BE APPLICABLE AS THERE IS A THRESHOLD LIMIT UNDER SECTION 194I. IF PARTY IS VERY ADMENT ASK THEM TO GET A CERTIFICATE FROM TAX OFFICE FOR LOWER RATE OF TAX

we had taken trucks on hire from market and placed the trucks to some other company for lifting marerials for another co.and that another co. dedicted tax against our payment. should we deduct tax from truck owners?

I m the truck owners( 4 Nos) and I have given the same to a Mfg Co on contract to transport their products and I m bearing the Salary of Drivers/Cleaners,Good Tax,Road Tax ,Insurance and  Running cost is to be borne by the Contratee. Total Receipt is more than 120000/- per annum.Pl advice whether Section 194C or 194I will apply and why...?

how much tds should be deducted by bsnl , if bsnl hires the vehicles through tender for motor vehicles 


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