Applicability of tds on travel ticket

[velayutham panchatcharam]

Please clarify with section whether TDS is applicable for travel ticket. If yes, in total bill value or their management fee.

[Dinesh Gupta]

Para 6 of CBDT circular dated 8.8.1995 read as: The payments made to a travel agent or an airline for purchase of a ticket for travel would not be subjected to tax deduction at source as the privity of the contract is between the individual passenger and the airline/travel agent, notwithstanding the fact that the payment is made by an entity mentioned in section 194C(1). The provision of section 194C shall, however, apply when a plane or a bus or any other mode of transport is chartered by one of the entities mentioned in section 194C of the Act. As regards payments made to clearing and forwarding agent for carriage of goods, the same shall be subjected to tax deduction at source under section 194C of the Act.

[Dinesh Gupta]

hence the No tax should be deducted u/s 194C on payment made to travel agent/airline for booking of tickets.This rule is also applicable on other transport medium like rail booking also.

[Dinesh Gupta]

Also see Circular : No. 5/2002, dated 30-7-2002.

[DEV KUMAR KOTHARI]

Full facts and own study should be indicated in query to share and enrich knowledge and experience. Purchase of travel ticket is like purchase of a facility for travel on a particular date on particular route by specified type of vehcles. It is not for transportation of goods or carrying out any work. Therefore section 194C is not applicable. The vehicle is not lese out in such cases, so section 194I will not apply. The matter may fall u/s 195 in case payment is made to a non resident.

AI Summary

Payments for Travel Tickets Not Subject to TDS Under Section 194C; Applies if Transport is Chartered A query was raised regarding the applicability of Tax Deducted at Source (TDS) on travel tickets. It was clarified that payments made to travel agents or airlines for purchasing travel tickets are not subject to TDS under section 194C, as the contract is directly between the passenger and the airline or agent. However, TDS applies if a transport mode is chartered. Section 194C applies to payments to clearing and forwarding agents for goods carriage. Section 194I is not applicable as the vehicle isn't leased. Section 195 may apply if payments are made to non-residents.