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

TDS on travel tickets: generally not deductible for passenger ticket purchases; applies if transport is chartered or payee non resident.
Payments to airlines or travel agents for passenger ticket purchases are not subject to contract-carriage withholding because contractual privity is between passenger and carrier/agent; chartering an entire vehicle triggers contract-carriage withholding, carriage of goods via clearing and forwarding agents remains subject to withholding, ticket purchases do not constitute vehicle lease and thus do not attract rent withholding, and payments to nonresidents may require withholding under the nonresident payment framework.