TDS on Extended Warranty purchased from Vehicle Dealer

[Dhara Sheth]

Will TDS be applicable on Extended warranty being charged by a vehicle Dealer ?

Fact: The Vehicle dealer has made an official Tie-up with an Insurance Company wherein they say that the amount collected from us will be paid to Insurance Company. The warranty cover costs of spares and Labour charges involved.

Please support with any circulars/Notification/Case-laws if any.

[Ramesh Kothari]

I opinioned that it is applicable due to existing warranty expired and it will treated new in name of extended period

AI Summary

TDS Applicable on Extended Vehicle Warranties: Considered New Post Original Expiry, Involving Insurance Payments for Spares and Labor. A query was raised regarding the applicability of Tax Deducted at Source (TDS) on an extended warranty purchased from a vehicle dealer. The dealer has partnered with an insurance company, stating that the collected amount will be paid to the insurer, covering spares and labor charges. A response suggested that TDS is applicable because the extended warranty is considered new after the expiration of the existing warranty.