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TDS on transport contractors :-Finance Act 2009 has made an important change in respect of applicability of TDS on transport contractors. Section 194C has been replaced and the following two sub sections provide for non deduction of TDS on transport contractors.

(6)   No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum.

(7)   The person responsible for paying or crediting any sum to the person referred to in sub-section (6) shall furnish, to the prescribed income-tax authority or the person authorized by it, such particulars, in such form and within such time as may be prescribed.

“goods carriage” means any motor vehicle constructed or adopted for use solely for the carriage of goods, or any motor vehicle not so constructed or adopted when used for the carriage of goods,”

Rate of TDS

Deductee Status TDS rate upto 30th Sept 2009 TDS rate from
st Oct 2009 to 31st March 2010
Individual ! HUF Contractor 2% NIL 1%
Individual ! HUF Sub-Contractor 1% NIL 1%
Others Contractor 2% NIL 2%
Others Sub-Contractor 1% NIL 2%

Condition for NIL deduction

  • Amount paid! credited on or after 01-10-2009
  • To a contractor during the course of business of plying , hiring or leasing goods carriage
  • If the contractor furnishes valid PAN

Prescribed return

  • It is necessary to track all such transactions as these will have to be reported to the income tax department.
  • The form and manner of reporting of such transactions is yet to be prescribed by CBDT.

Whether to include such transactions in eTDS statement

  • A question arises if it is necessary to show such transactions in eTDS statement.
  • One way would be show these transactions in eTDS statement with normal rate and TDS amount as Zero.
  • Another way is not to show such transactions in eTDS statement, as a separate form will have to be filed in any case.


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  1. ROY says:

    Please let me know the prescribed form and manner to submit the details of Transport contractors payment who are coming under the nil tds catagory, TDS was abolished on transport contractors 2 years back, and said a seperate form will be prescribed for the details to be submitted to the department by the transport contractor.

  2. Prayas Jain says:

    The rate of 20% in case of non-furnishing of PAN shall be made applicable in all the cases where tax is required to be deducted at source.

    The government must come out with the prescribed form ,if any, for TDS on transporter before 01.04.10.

  3. Reason for Delay ? says:

    The prime issue is that why Govt. does not issue the prescribed forms in time. It is practically very difficult to prepare /collect the data related to past period. Sometime assessee has to compile the data /information manually which takes a lot of time. The concerned authority should also take care of the issues which are practically faced by assessees. It may be noted that if there is a delay of single day on the part of assessees,they have to bear its cost /penalty. This seems to be like one way traffic.

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June 2024