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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

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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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136 Comments

  1. Rajesh R H says:

    Dear Sir, Incase of Lorry Hire payment is made to a for Truck procured thru an online portal and payment is done to Truck driver just like OLA & UBAR, the bill is given by the APP/Portal. In this case what will be the TDS implication is not furnishing PAN No or Declaration & the Bill is provided by the APP

  2. ramkrishna bodakhe says:

    if we have hired vehicles from any Transporter who have less than 10 own vehicles and he hired from someone a who have more than 10 vehicles and provided us in such case we have to dedect tds or not

    1. Taxation & GST Dost says:

      If your Bus Service Bill in one time more than 30000/- or exceeds 1,00,000/- in a F.Y, then you have to deduct tds on payment.

  3. Deccan Transport says:

    hi sir , i have a doubt if the company doesn’t owns more than 10 veh and tds not to be deduct only on Transport invoices or warai , unloading ??

  4. KAMOD KUMAR GUPTA says:

    Dear Sir,
    We have a receive transporter bill of Rs.50000 per month and if the transport is a proprietor ship company, then TDS shall be deducted .
    please suggest me.

    1. MOHD HASAN says:

      Dear Sir, We have a receive BUS Service bill of Rs.140,000.00 per month and if the transport is a proprietorship company, then TDS shall be deducted .

      Please suggest me.

  5. Sumit Sarkar says:

    Transporter ka khud ka nahi hai, transporter dusre ka gari lekar transport karta hai or khud ka bilti deta hai. es condition main kitna % TDS hona chahiye

    1. SHUBHAM says:

      JISKI BILTY HAI USKA PAN CHECK KRO
      AGAR USKA PAN INDIVIDUAL KA HAI TO 1 % TDS OR AGARA USKA PAN OTHER THEN INDIVIDUAL HAI TO 2% TDS DEDUCT HOGA

  6. Ritesh says:

    Sir if Transporter Bill is of 31325 with GST & Basic Amt is 27969.20 is limit Cross From Rs 30000 Should I Deduct Tds or not Their Are Two Bills of such type.

      1. MOHD HASAN says:

        Sir/Madam if CONTRACTOR Bill is of 35400 with GST & Basic Amt is 30000. Should I Deduct Tds or not Their Are One Bills and i have no idea in future bills will be receive or not.

  7. Ganesh says:

    service provider charged Rs.120000 as a testing charges & Rs.15500 as a transportation charges then we should deduct tds on Rs. 120000 or Rs. 135500 ?
    and under which section of TDS ??
    please guide us….

    1. sandeep says:

      TDS Will be deducted on nature of payment. if there engaged transport company who having more then 10 carriages will be deducted TDS as per norms.

  8. NITIN KWATRA says:

    i am starting a small transport company i am hiring chota hathi (autios) for goods bill of one person approx 200000 per year thus do i have to detuct tds

  9. Vikas Gupta says:

    Is there any TDS levy on water transportation charges (charges paid for transportation of goods from one port to another) and under which section?

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