TDS on Car Taxi

[Pradeep Jain]

Dear Sir,

Our Company hires car taxi for official work . At the time of payment , TDS would be payable under section 194C or 194I

Regards

Pradeep Jain

[CAGOPALJI AGRAWAL]

Pradeep Ji

It would depend on the terms and conditions of the contract. If the car taxi is under your control and you are paying fixed rent of the car on day or month basis, Section 194I would prevail and if it just on normal hiring on trip basis including fuel etc then 194C would be applicable

[YASHAVANTH RM]

If the hiring of Car weekly, fortnightly, monthly or any basis which will be under the mutual agreement / acceptance between you and the Vehicle owner, which will be deemed as Contract. You have to deducted 1 percent if Individual, 2 percent if the company. Also you have to pay Service tax on reverse charge mechanism, at the rate of 4.944 percent ( 12.36 percent of 40 percent of the bill value ).

AI Summary

TDS classification on hired car services: fixed periodic rental treated as rent withholding, trip-based hiring treated as contract payment. TDS on motor car hiring hinges on contract terms: fixed periodic payments for vehicle use treated as rent attract 194I, while trip-based hiring including driving and fuel is treated as contractual service attracting 194C. Withholding rates vary by payee status and the payer may also be liable to discharge service tax under reverse charge on the hiring service.