TDS on vehicle rent / hire

[Hemant Pandit]

Sir,

Whether vehicle taken on rent/ hire require to be deducted TDS u/s 194C or 194I?

Please give case law if possible.

[CAGOPALJI AGRAWAL]

The terms of the agreement would decided the fate. It may fall u/s 194C if the possession remains with the owner and section 194I(a) otherwise.

[CA Rachit Agarwal]

If the vehicle is taken on monthly basis, and fixed rent is paid then it would get covered under Section 194I, however if the vehicle taken on hire is on basis on requirements as when required then it would fall under 194C..

AI Summary

Clarification on TDS for vehicle rental: Section 194C for hiring, Section 194I for fixed monthly rent agreements. A query was raised regarding the applicability of Tax Deducted at Source (TDS) on vehicle rent or hire under sections 194C or 194I of the Income Tax Act. One respondent stated that the applicability depends on the terms of the agreement: if possession remains with the owner, it falls under section 194C; otherwise, under section 194I(a). Another respondent noted that if a vehicle is rented on a monthly basis with fixed rent, it falls under section 194I, whereas hiring based on specific requirements falls under section 194C.