TDS Rate - 194C / 194I

[Ethirajan Parthasarathy]

Payments made for transport of goods or passengers are specifically included in sec.194C

But an agreement provides for minimum guaranteed amount per day which entitles use of vehicle upto 100 km for transport of goods & passengers. Excess milage used is chargeable per km basis.

In such scenario, a company may pay minimum guaranteed amount even though vehicles has run, let us say 50 km in a day. Whether in such scenario TDS is attracted u/s 194C or 194I

[Ganeshan Kalyani]

Whether the vehicle is in your control. If yes, then it is renting of vehicle then 194I will be applicable. Otherwise only 194C is applicable, even though minimum guaranteed amount is paid to you.

AI Summary

Rent characterization determines TDS: vehicle under hirer's control attracts rent TDS, otherwise contract-for-transport TDS applies. TDS treatment for payments combining a daily minimum guarantee and excess-per-km charges depends on vehicle control: where the hirer has operational control the payments are rent and attract TDS under the rent provision; where the provider retains control and supplies transport services the payments remain for carriage and attract TDS under the contract-for-transport provision. A minimum guaranteed amount alone does not convert a transport contract into a lease.