Most of the time I observed that in the industry there are always be a confusion regarding application of Section 194C i.e. TDS on contract at the time of payment to the transporter. This is might be because of various amendments has been taken place since last so many year related to this specific point i.e 194C(6) and 194C(7). Hence today I will try to summarise the details of only these two smalls but very important sub-sections of Section 194C.

Important Points – TDS under Section 194C on Payments to Transporters

1. This amended sub-section is applicable w.e.f. 01st April, 2015

2. The transporter for these sub-sections means person handling business of plying, hiring or leasing goods carriages.

3. The benefit of non-deduction of tax will be available only for small transport operators owning not more than 10 goods carriages.

TDS - transportation charges

Hence if the transporter owning not more than 10 goods carriages at any time during the year, provide his PAN alongwith the declaration then as a payer, you don’t have to deduct his TDS u/s 194C.

But if the transporter owning more than 10 goods carriages at any time during the year, then you, as payers are liable to deduct TDS at the time of paying charges to goods transporter at the rate of 1% or 2% as the case may be; based on the transport contractor’s status.

Note: The above mentioned rate i.e. 1% and 2% will be reduced to 0.75% and 1.50% respectively during the period starting from 14th May, 2020 to 31st March, 2021.

4. The person responsible for paying or crediting any sum to the such transporter shall furnish declaration along with PAN to the income-tax authority.

The link for the format of declaration is as under:

Download Format of Declaration to be obtained on the letter head of the Transport Contractor in case of non-deduction of tax at source u/s 194C (6) of the Income Tax Act, 1961

*****

Disclaimer: The contents of this article are for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

(Republished with Amendments by Team Taxguru)

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111 Comments

  1. Pradip Satani says:

    I have received LR for the month of May.2015 and entry done in June.2015
    In this case we should deduct TDS on Transport or Not ???

    Please Guide me

  2. sandeep says:

    Dear
    . sir this exemption only vehicle owner who give the own vehicle but goods transport agent also however GTA not a compulsory to own vehicle some case only agent

  3. Rout says:

    Dear Sir(s),
    We have paid transporting charges of building material above 200000/- and PAN of transporter is kept by us,i want know TDS is deducted from transporter or not.
    Please give suggest above ref.

    Regards,
    Rout

  4. muruganandham says:

    Dear Sir,

    Material received from France now we have pay to Courier charges. They are sending bill copy to me. purticulor vendor service available from India also but PAN not available now we will process the invoice so TDS rate how much on the bill.

    Please advise..

  5. m f hirolli says:

    i have made Rs 4200000/- as lorry freight to the lorry owner during the year 2011-12 & i have also collected their PAN no & R C Book, please advise me whether i have to deduct tds or not

  6. S Patil says:

    If invoice it’s self vendor are chareged frieght charges,but service tax is not charged,for this TDS is applicable?,and if applicable means for only frieght charegs i needs to deduct tds or what? pls give me solution.
    Thanks
    S patil

  7. jeegnesh gokani says:

    i wnt to knw that it is compalsary to submit the record of trasnsportation and pan no. of party to income tax department.

  8. RAMAN says:

    Dear Sir,
    We have hired a bus service for pick & drop facility for our staff. Should we deduct tds while payment of transport bill if he have only one vehicle in his name…………

  9. sandeep says:

    Sir,

    I have to pay the bus rent which is hired for company tour for rs.43000 please let me know whether i have to deduct the TDS if payment is more than 30,000 in single transaction.

  10. shantanu dutta says:

    one supply contract for geojute with specific configuration was made with a proprietorship firm on wbf no.2908.Transportation charge was included in the rate offered by the firm.Now the question is wheather incometax(in percentage)is to be deducted or not?

    1. P.Malleswaran says:

      Sir,

      i have one adbout about this, what is the Purchase Order Terms, Who will paid by the freight.

      including of the freight we cannot decut the TDS

      regards
      P.Malleswaran

  11. Sivaram says:

    Sir,

    We are hiring trucks for movement of containers. Sometimes, transporter is charging us additionally for the halting of the truck at yard for various reasons. Since transportation charges is exempted from TDS if PAN provided, whether this halting charges is as a part of the transportation or it has to be considered to tax. We await your feedback.

  12. Nitin says:

    When a transporter doesnot provide PAN no then TDS on such shall be deducted at the rate of 20%. but transporter’s limit as per 94-c Rs. 30000/- doesnot exceed. then which amount should be disallowed under chapter XVII-B OF 3CD REPORT ?

    1. Satish says:

      Dear Sir,

      If the contractor not provide the PAN No. then we have to deduct the TDS @ 20%.

      My Query- what is the limit for TDS, if Transporter dose not provide the PAN No.

      Eg: If i pay Rs 12000/- to a transporter for the year 2010-11, then i have to deduct the TDS or not.

  13. ishwar singh rathore says:

    sir,
    meri ek transport copany h mene contract liya hua h usme f.y.2010-11 me t.d.s.nhi katne ki limit kaha tak h .so aap me bataye

  14. s.Mishra says:

    if a person who know the repairing work well and submit the bill for payment up to Rs. 10000/- will be required PAN Number and if he has not the same whether he is bound to some % of amount of TDS.

  15. RAJINDER KUMAR says:

    Dear Sir,

    Pl. suggest me a transport freight paid Rs.209500 in f.y. 2010.11, and I have receive Pan of Transporter. and suggest me TDS return filling in 4th Q and mention the transport name and detail of freight in Tds return in which section.

  16. M. Y. S. Rao says:

    is there any TDS for the payment of Rs.2,50,000/- for supply of buses for pickup and dropping of the students from various places to college and back to their places. and can we give the cheque to the individual name, even he submit the bill in the form name?

    1. varalakshmi says:

      Mr Rao

      If any travels provide bills for pick up and drop of students, then concern college has to deduct TDS @ 1% for Indivijual ownership of travels . we can give cheque in the name of indivijual eventhough they have submit their bill in the name of their company .for eg kalaivani travels submit their bill but they require cheque in the name of raju means we can provide .make sure that travels had PAN CARD.

  17. kumar says:

    Sir

    I am charging transportation charges in our bills.
    I have a proprietary co. the turnover of the co is 25 lacs.
    Can I deduct tds on transport charges.
    I am charging tpt like 700/- 1000/- 1400/-.

    regards

  18. RATAN AGARWAL says:

    Dear Sir,

    Please tell us the TDS liability if an employee not provide there PAN no.

    Salary detail of employee P.A. are as under:

    Net Basic HRA Conv Ed.All Medi. All. Prof All. Over Time
    102315 18000 15000 0 10800 3600 24000

    Rent Paid Rs.200 p.m. & LIC Premium paid 10000.00
    Can he claim deduction of HRA, Conveyance Allowance & 80C.

    Thanking You

    Regards,

    Ratan Agarwal

  19. murali says:

    sir in my govt office a lady is working as loading/unloading contractor. she has privided PAN. and thus TDS not being deducted, how is her tax calculated and which return is to be give4n by (1) firm (2) the contractor

  20. prakash sutar says:

    I want to confirm that the TDS rate for transportation is applicable from 01.04.2010 cause as per amendment TDS on transportation is not applicable till 31.03.2010 & after that it shall be 20%. It is totally confusing please clarify.

  21. juhi says:

    ek bande ki apni 1 pessenger transport business h, wo apne clients k vehicle rent per deta h or hire chares after deduction of tds u/s194c receive kerta h, kyuki uska unke sath contract bana hua h.

    wo ye vehicle khud rent per receive kerta h lekin uska apne kisi creditor se koi contract nhi h isliye wo tds nhi katata unhe full payment ker raha h.

    uska rent pay kerna n hi to 194c m ata h(kyuki contract nhi), or n hi 194-i m ata h(include only land-building, furniture & fixture and plant & machinery).

    use tds katna chahiye ya nhi..?

  22. kapil rathi says:

    If the contractor not provide the PAN No. then we have to deduct the TDS @ 20%.

    My Query- what is the limit for TDS, if Transporter dose not provide the PAN No.(f.y.2010-2010)

  23. suresh says:

    If the contractor not provide the PAN No. then we have to deduct the TDS @ 20%.

    My Query- what is the limit for TDS, if Transporter dose not provide the PAN No.

    Eg: If i pay Rs 12000/- to a transporter for the year 2010-11, then i have to deduct the TDS or not

    1. varalakshmi says:

      dear suresh/shabana / sushil

      It’s a must for every person to have PAN card, if they dont have we hav e to deduct @ 20% , but there is a limit for contractors for FY 2010-11 (1) From april to june 2010 , if any transporter provides single bill of rs.20000/- or Rs.50000/- aggregate for whole year the we have to deduct TDS @ 1% for indivijual ownership and @2% for pvt ltd concern.(2) /from july 2010 itself single bill of Rs.30000/- and aggregate of Rs.75000/- we can deduct TDS.

      For eg any transporter raised only bill value is Rs.12000/- for whole fy 2010-11 , then no need to deduct TDS .

  24. sanjay says:

    sir,

    i am working is a automobiles company as a accountant post. plz give me wright solution of my qustions what tds rate deducted in transportaion in f.y. 2010-11
    plz give me soon a sutaible answer in my mail id.

    thanx…..

    1. varalakshmi says:

      dear sanjay

      The transporters are coming under “contract”, so 1% for indivijual and 2% for pvt ltd transporters. one thing u have to remember that if they submit their invoice alongwith all supporting documents then no need to deduct TDs but for service charges and serv tax , we have to deduct TDS

  25. Siva says:

    I heard that if it is a propritor ship concern the transporter could provide the PAN copy of the proprietor and get full amount. If it is true how we could measure the relation between the PAN holder and transport.

  26. sudhakaran says:

    I am working as an accountant in a retail Tiles & sanitary wear showroom. I would like to know about the TDS on freight & service tax payable on transport by road. Please help me. Please find below bifurcated example and answer me what I want to do in this case and also give me the related sections in IT & Service tax.
    Example :- Ocean freight = 46000
    Service Tax 10% = 4600
    Cess 2% = 92
    HEC 1% = 46
    ——-
    Total = 50738
    Road freight = 25702
    ——-
    Grand Total = 76440
    =======
    (Please explain me the above case by below given reasons.
    1. If the transporter having PAN number?
    2. If the transporter have not PAN number?
    2. Our showroom had turnover above 40lakhs. If in the case of below 40lakhs turnover what to do?
    3. If the transporter had not given the bifurcation of service tax and only writing the total freight in the receipt?)

  27. u/s 94C which type of transport contract covered says:

    Sir,

    My company is pharma co.we have pay different type of payment to transportor such as EXL, TCI, XPS, GATI.

    My query is whether we should deduct TDS or not if not please explan. Which type of transport contractor covered under this section.

    My E.Mail ID :- vermasande79@gamil.com

    Regards

    Sandeep Kumar Verma

        1. Veer says:

          Hi,

          i am going to make a payment to a Transporter Rs.75000/- and also i have the PAN of the transporter than according to IT ACT the TDS should be 1%(Individual).

          Tell me is right or wrong.

  28. shrivari says:

    sir ,
    We are Doing trading of agri item
    {onion,vegatable } item and we are
    paying lorry freight 20 thousand above
    the question is
    1.I want to cut TDS in the freight which
    I am paying to the lorry driver?
    2.In agri item TDS not applicable ?

    kindly give us a solution ,thx

  29. Manoj Kumar says:

    Dear Sir,

    we are not deduct TDS after providing PAN from Transporter. Is any return is compulsory to file with TDS department if yes then in which return shal be filed. Please advise me.
    Thanks & Regards
    Manoj Kumar

  30. biren shah says:

    if one person make payment of Rs 10000 to transporter and transporter do not furnish his PAN then whether to deduct TDS at 20% or no TDS deduction as limit of 30000 or 75000 has not exceed ?

  31. Ankita Sharma says:

    sir, if kisi employee ne PAN No. ke liye apply kara hua hai, then uska TDS kitna katega? kya aisa ho sakta hai ki PAN card ka acknowledge letter attach kar diya jaye.

  32. Director General, State Transport says:

    Transport department haryana is govt. department and picking HSD (Diesel) from IOC, Terminals through its own tankers. The IOC issue a notice that PAN may be given to the IOC otherwise TDS @ 20 percent will be deducted from the freight charges being refunded to the transport department, haryana.

    i) is TDS is leviable on Govt. departments. if yes under which section.
    ii) PAN is issued to individuals, we are ready to give TAN No. IOC but IOC is not accepting it. Is PAN is mandatory ? can a Govt department be issued PAN instead of TAN.

  33. Director General, State Transport says:

    Transport department haryana is govt. department and picking HSD (Diesel) from IOC, Terminals through its own tankers. The IOC issue a notice that PAN may be given to the IOC otherwise TDS @ 20 percent will be deducted from the freight charges being refunded to the transport department, haryana.

    i)

  34. CA Rahul Roongta says:

    Sir, My company have given a EPC contract to BHEL. They are transporting the material at our factory and erecting the same. In our billing schedule, we have separate amount for freight also on per ton basis.
    BHEL is making 1 invoice in which he is showing supply amount and freight amount separately. BHEL must be arranging transport from outside as it is not transport company and charging the same from us on per ton basis. Obviously, BHEL has given us the PAN.
    My query is whether we should deduct TDS on this freight amount..in my opinion i should now..i require ur opinion…with some explanation.

  35. vinod says:

    but sir mera ca kehta h ki apko tds katna padega q ki ap payment gadi wale ko na karte huve kisi sub contratore ko kar rahe, or income tax act k hisab se gadi wale ka pan no. lekar payment direct gadi wale ko karte h to tds nahi katna

  36. VINOD says:

    sir, i have a problem pls give me ansure,
    mera ek trasport h, or mene contract le rakha h ek com.se uska mall sahi jagah pauchane k liye me market se kisi sub contractore se truck bulata jo ki market ka koi b truck mere pas bhej deta, or me sub contractore to freight ka payment kar deta hu uska pan no.lekar. or me koi tds nahi katta hu, kya me sahi kar raha hu ya muje tds katna chahiye sub contractore ka.

  37. Satyanarayan says:

    R/Sir,

    If truck owner having only 2 trucks and plying with any contractor, then he is lible for TDS deduction by his freight charges or not in fin yr.2009-10 up to 30/09/2010. owner having self PAN No. and he is tax payer,
    Kindly sugest

    Thanks

  38. Deepak Pandey says:

    If PAN details is not given at the time of making payment but the after 2/3 month (as well as after return filing day) the same transporter giving the PAN details, at this moment what is to do????????????? solve

  39. Deepak Pandey says:

    This rules i.e if PAN details not found then TDS will be deducted at higher rate, this rules are applicable only for transportation or all the contract falling on section 94C

  40. Pawan Kumar Kedia says:

    Whether we should obtain PAN number of Truck operator or of the Transport Company who has issued consignment note regarding transportioan of goods.

    Please guide.

  41. swapna says:

    If a transporter bill’s for Rs.44,000/- but he is furnishing us PAN No. then we will have to deduct tds. Also tell me what is the exemption limit for transportation services?

  42. Deepak Pandey says:

    If transporter giving wrong PAN for lowering the deduction amount, for this who will be responsible????? me or the transporter??????????

  43. Deepak Pandey says:

    If the transporter has applied for PAN on the date of making payment then at what will be the rate of TDS?????????? Kindly Suggest

  44. satish sharma says:

    If transporter not providing his PAN and we have deducted the TDS the please confirm how we can file TDS ret. without mentioning PAN No.

  45. Basanta Kumar says:

    “This provision is applicable on payments made from October 01, 2009 to March 31, 2010. Such case should be determined by checking whether the Deductee has provided his PAN to the Deductor, during the payment.

    When PAN not furnished the TDS will be done @1% or 2% as the case may be.After march 2010 this rate changed to 20%.”

  46. Bijaya Kumar Dash says:

    kindly provide me the return form in which we will submit the information to I.T department
    for tds exemption to transportor.
    when it will be submitted.

    please leave a reply of above

  47. Pramod says:

    Normally transporter owners are sole proprietorship , if a transporter gives wrong PAN No inorder to avoid Higher tds dedcution, who is responsible for this.

  48. Dheerendra says:

    Sir, what is the defination of transporter. i have a tranpoter who some times despatch the material throuth taxi or sometimes through hand delivery vise versa………….

    clear me on this.

  49. manoj says:

    If karta is not presenting HUF he is working as individual(he is an active partner)than all above income should be considered in the income of Individual.

  50. P. Ghanshyam & Co. says:

    HUF is partner in Partnership firm and Karta of HUF is active partner in Firm. Karta receive Salary, Interest on capital & Commission from Firm. Under which status the above income will be taxable ? HUF or Individual ?

  51. Pankaj Lohiya says:

    Sir,
    I am confused in a matter that if transporter not given their PAN no. then the deductor must deduct the tax. But I want to know that Is it possible to file tds return of transporter having no PAN number???
    plz give your comment on it.
    Regards,

  52. vikas says:

    looks like 20k & more if one time and 50k & more if total annually. Though it is still confusing because clear threshhold limit is not mentioned in case of transportaion in sec 194C.

  53. Rohit Gupta says:

    Dear Sir,
    I want to know that in case of Section -194C (Transport Contractor) if any assessee has not provide PAN than we have to deduct TDS but exemption limit of Rs. 20000/- per contract or agregate Rs. 50000/- per annum is available in this case or not please clearify.

  54. Anand says:

    If transporter furnished PAN then
    TDS will be deducted at rate ??

    If transporter not furnished PAN then TDS will be deducted at rate ??

  55. vikas says:

    same query as of Mr Hiren’s on if TDS to be deducted if the PAN not available but payment within threshhold limit. Does threshhold limit under 194c still exist fot transporter ?

  56. Hiren says:

    We paid Rs. 10000/- as Transportation Charges and the party has no PAN No. Is TDS required to deduct. and the Exemption limit of Rs. 75000/- is considered or not ?

  57. bavitha says:

    Sir,
    we are sending our consignment through a transporter.should we deduct tds from his payment.he has provided his pan details.

    and i would also like to know about the service tax.should we pay service tax.our one months transport bill is more than 10000.but we ha not registered still for service tax.

    please do reply me.

  58. bankim says:

    01/04/2010 what rate of t.d.s. like transporter, pur. freight, commission, interest paid, m/c. and plant rent etc.
    and what format of t.d.s. certificate

  59. Rohit bhandare says:

    My father having flat in pune which given on rent and this rent debited to my bank account.Due to this i cross over income tax exemption limit.So I want to know would this rent added in my income?

  60. Sujit Shetty says:

    Would this nil rate of tax be applicable if the payment is done to a transport contractor who does not own the transport vehicle but has acquired the mode of transport from another person. Does such a person qualify to be treated as a transporter eligible for nil rate of tax during the course of plying, leasing or hiring oods carriages.

  61. rohit bhandare says:

    sir,
    our company senior officer frequently hired car for visit of site and person whom car they hired is on regular basis,so please advice should i deduct tds on that transportation?

  62. Parmod says:

    If a transporter bill’s for Rs. 22500/- but he is furnishing PAN then we will have to deduct TDS & if he is not furnishing PAN then what should we do.

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