Amit Bansal

Amit BansalIntroduction: Under the existing provisions of section 194C of the Act, payment to contractors is subject to Tax Deduction at Source (TDS) at the rate of 1% in case the payee is an individual or Hindu Undivided Family and at the rate of 2% in case of other payees, if such payment exceeds Rs. 30,000 per contract or aggregate of such payments of contracts in a financial year exceeds Rs. 75,000.

Current provision for transporter is non-deduction of tax from payments made to the contractor during the course of plying, hiring and leasing goods carriage if the contractor furnishes his PAN to the payer. Intention behind this provision was to exempt only small transport operators from the purview of TDS on furnishing of PAN, but it does not convey the desired intention and as a result all transporters (irrespective of size) are claiming exemption from TDS.

Now the provision of section 194C of the Act has been amended to expressly provide that the relaxation from no-deduction of tax shall only be applicable to the payment in the nature of transport charges made to a contractor who is engaged in the business of transport i.e. plying, hiring, or leasing goods carriage and a person who is not owing more than 10 goods carrige at any time during the previous year and who has furnished a declaration to this effect along with his PAN.

Intent of the amendment:

The Memorandum explaining the provisions of Finance (No.2) Bill 2009 indicates that the intention was to exempt only small transport operators (as defined in section 44AE of the Act) from the purview of TDS on furnishing of Permanent Account Number (PAN). Thus the intention was to reduce the compliance burden on the small transporter. However, the current language of sub-section (6) of section 194C of the Act does not convey the desired intention and as a result all transporters, irrespective of their size, are claiming exemption from TDS under the existing provision of sub-section (6) of section 194C of the Acton furnishing of PAN

Summary:

This means if a transporter is owing more than 10 goods carriage at any time during the previous year, then payer is 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, and

If transporter is not owing more than 10 goods carriage at any time during the previous year, then payer(Tax deductor) has to obtain a declaration from transporter along with his copy of PAN before execution of the contract or payment to transporter whichever is earlier.

This amendment is inserted with effect from the 1st day of June 2015.

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Category : Income Tax (27900)
Type : Articles (17611) Featured (4025)
Tags : pan number (273) Permanent Account Number (100) Section 194C (148) TDS (1071)

58 responses to “TDS on payments made to transporters wef 01.06.2015”

  1. VENKATA RAJU says:

    Dear Sir,
    This query is regarding TDS deduction to transporter, if a transporter dose not give declaration as defined in section 44AE , regarding that he dose not own more than ten goods carriage at any time during the previous year.
    So, in this case how we have to deduct TDS .

    Thanking You,
    Regards.,
    P.V.Raju

  2. AJIT KUMAR says:

    Section 194C does not define about goods it is related with transport business. Accordingly TDS can be deducted as per law.

  3. CA SUDHIR GOYAL says:

    First of all you should ask declaration from all transporter having 10 or less trucks.

    If you are not liable to deduct TDS on any transaction then it is not mandatory to apply TAN and TDS return too.

  4. salim p kalu says:

    Dear Sir

    Please advice me on the following points

    i m in d business of export of agricultural produce i.e. onions and potatoes and doing d business at and from mumbai maharashtra.

    lot of different goods vehicles bring onions and potatoes from the different parts of state of maharashtra, gujarat and madhya pradesj and karnaka etc.

    shall i deduct tds on total transportation charges paid to them or shall i obtain only pan no and declaration from them for non deducting tds.

    is it that tds is not applicable for those who transport the vegetables and agricultural produce for export purposes.

    please suggest

  5. Manish Singh says:

    Dear Team,

    I am a supplier and hiring truck from transporter and maximum transporter/ owner is having less then 10 truck therfore as per provision of TDS, TDS will not applicable subject to declaration and copy of PAN.

    I am Individual assessee as per IT Act. and there is no other translation on which I need to deduct TDS.

    Now my doubt is I need to apply TAN and file TDS return as NIL or no need to file return and TAN.

    Please Help.

    Regards,
    Manish Singh

  6. srinivas rao says:

    Dear Tax team,

    Q1.
    If transporter is not crossed more than 30k per transaction and pan also not provided stightly deducted TDS 20%. or not ,please suggest.

    Q2.
    Some employee put it in reimbursement transporter bill, that bill amount is not crossed mone than 30k and pan number also not available on that transporter bill. in this case we will deduct tds. please suggest.

  7. Rajesh Thakur says:

    We pay Rs.18000/- PM Security Charges.First Four Month we not deducted TDS, but after crossing the limit Rs.75000/- we can to pay TDS on that first four month also ? can we pay interest on it. Please give suggestion Give example how to pay Tds in Month of November-15 with interest we are not paid TDS yet.

  8. mithilesh says:

    Sir,

    we are paying the payments to transports per bill rs. 500 to more than 10000 and monthly rs. 40000. so we are required the decleration form or not

  9. Lakshmi Kanta Maity says:

    we are paid as freight charges Rs. 5,000/-to transporter (same truck no.) weekly basis. or monthly paid Rs. 20,000/-. do I deducted any TDS? please reply me.

  10. M Ravinder says:

    TDS applicability if Transporter not providing the PAN. If deducted then how can make the return without mentioning transporters PAN No.

  11. Ganesan.p says:

    Sir,

    Let us know whether I have collected declaration form U/S 194c(6) from transporters for each and every bill or annually and i have uploaded the declaration form details in TDS return.

  12. SYED KALEEM ULLA says:

    What is the rate of TDS to be calculated on the truck freight where
    owner is having less than 10 trucks in the following cases:-
    i) If he does not produce copy of PAN card?
    ii) If he produces only copy of PAN card?
    iii) If he produces copy of PAN Card, Copy of RC & Declaration form?

  13. vijay says:

    hi sir,
    im transport agent, and do no t own trucks i take it from lorry market to serve my parties in rajasthan and gujrat. all trucks will get freight with parties or with me.
    pls explain my TDS system. what should i do?

  14. Basant says:

    We have made a contract with transporter. our transporter not having any vehicle. transporter made sub contract with other transporter and submit bill in his own name. total contract value is 10 crore.
    Whether TDS is appliable?

  15. Harsha says:

    I want to knows if the transporters having less than 10 vehicles. Then if he gives declaration in his company letter head along with pan card is this enough for the company for not deducting TDS or the transporter has to get the certificate from Income tax for non deducting TDS.

    Kindly clarify what to do regarding this.

  16. Lokesh Khattar says:

    Sir my question, as per new amendment on 1st June, 2015, “where such Contractor owns 10 or less goods carriages at any time during the previous year and furnishes a declaration to that effect along with PAN, to the person paying or crediting such sum, No deduction shall be made from the sum credited or paid”.

    Is same provision applicable on Transport union if they have more than 10 vehciles during the previous year and furnishes PAN and declaration to the person crediting such sum?

  17. Keshav tiwari says:

    Q:1- ek campany kisi lorry owner(lass than 10 goods carrier) ko paiment karega to tds katega ya hahi
    Q:2 – declation form ?notri se attesed karana jruri hai

  18. Vijayta says:

    What is toll charges are paid by the transporter? Are we required to deduct TDS on toll charges also.

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