TaxTMI 
TaxTMI 
Dear sir, please clarify payment to sub-contractors is nil against submission of PAN No.? we are construction contractors we are using transporters for material shifting one place to another place and also we are paying to TCI like transporters TDS is NIL to this contractors too. please advoice
Clarification - Sub-contractors payment
06 Oct 2009 
2 Replies 
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TDS exemption for transporters applies when PAN is furnished, while subcontractors remain liable for tax deduction.
Under Section 194C(6), payments to persons plying, hiring or leasing goods carriages are not subject to tax deduction if the payee furnishes a PAN; this exemption covers transporters but does not extend to subcontractors, who are treated as contractors and remain liable for deduction. Payors should obtain and retain PAN documentation and any required declarations, and monitor rule amendments prescribing additional information. (AI Summary)
Under Section 194C(6), payments to persons plying, hiring or leasing goods carriages are not subject to tax deduction if the payee furnishes a PAN; this exemption covers transporters but does not extend to subcontractors, who are treated as contractors and remain liable for deduction. Payors should obtain and retain PAN documentation and any required declarations, and monitor rule amendments prescribing additional information. (AI Summary)