DEDUCTION OF TDS

[S.C. WADHWA]

Dear Sir,

 

A company is hiring taxi services from an individual the bill in respect of which for the financial year 2011-12 is about Rs. 100000/-.

 

I want to know whether the company is required to deduct tds on same or not.

 

If, it is required to deduct tds, please tell under which section it should be deducted.

 

 

 

 

 

[kolasi raghu]

The Company is Required to deduct TDS

U/S  194C. the Rate is2%.

 

[ASHISH DESAI]

TDS u/s 194c will applicable otherwise section 194I is to be deducted @1%, if payee is an individual.

however, first verify the terms of the car hire agreement to confirm the applicability of Section 194c will applicable otherwise section 194I.

if section 194I is applicable, then no TDS till Rs.180,000/-.

AI Summary

TDS on taxi hire: determine whether payments are contractor receipts or rent type receipts to fix withholding obligations. When a company hires taxi services from an individual, the payer must determine whether payments are contractor receipts requiring deduction at source under contractor provisions at the contractor withholding rate, or constitute rent/lease type receipts attracting the rent withholding rate for individuals; verification of the car hire agreement is necessary, and the rent withholding route may include a threshold exemption below which no deduction is required.