TDS deduct on warehouse insurance charges is applicable or not

[MUTHUKUMARAN K]

we got private bonded warehouse invoice. They collect Cargo storage Charges and Insurance Charges.

we dedect 10% TDS on both Storage and Insurance Charges its correct or not.

with regards

K.Muthu Kumaran

 

[Sadanand Bulbule]

10% TDS is to be deducted under Section 194J of the IT Act while making payment of fees /remuneration/commission for professional or technical services rendered.

However, cargo storage services, not being professional or technical services, fall under Section 194C liable to 1% or 2% TDS. So double check the facts.

[MUTHUKUMARAN K]

Sir thanks your reply.

But we deduct TDS 10% on Cargo Storage Charges treated at Rent - 194I

Warehouse insurance charges collect the same invoice so TDS deduct or not?

with regards

K.Muthukumaran

 

[Sadanand Bulbule]

TDS  on rent @ 10% is ok under Section 194-I[b] of the IT Act.

If insurance is cahrged as composite supply by the same warehouse owner, it forms part of gross rent consideration. Oherwise, if it is pass-through cost, no TDS is applicable.

[MUTHUKUMARAN K]

Sir thanks for your reply.

Warehouse insurance calculation is cargo value X no of weeks X Rate.

please surely confirm TDS deduct or not.

with regards

K.Muthukumaran.

 

[Sadanand Bulbule]

Refer clarification on deduction of tax at source on rental income under section 194-I of the Income-tax Act:

Circular No. 4/2008 dated 28-4-2008

 

[MUTHUKUMARAN K]

Thank you Sir .

AI Summary

TDS at 10% under Section 194-I applies to warehouse rent including cargo storage and composite insurance charges TDS at 10% under Section 194-I is applicable on warehouse rent, including cargo storage charges treated as rent. Insurance charges included in the same invoice may be considered part of the composite rent if charged by the warehouse owner, thus attracting TDS under Section 194-I. However, if insurance is a pass-through cost separately charged, TDS is not applicable on that portion. Cargo storage services alone do not qualify as professional or technical services under Section 194J, and typically attract TDS under Section 194C at 1% or 2%. Clarification from Circular No. 4/2008 supports the applicability of TDS on rental income, which includes composite charges forming part of rent.