Case Law Details
Section 194C of the I.T. Act provide that any person responsible for paying any sum to any resident for carrying out any work (including supply of labour) for carrying out any work, in pursuance of a contract between the contractor and a specified person, shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by any other mode, deduct amount equal to 1%,
where the payment is being made or credit is being given to an individual or HUF, 2% where the payment is being made or credit is being given to a person other than an individual or HUF, of such sum as Income Tax on income comprise therein. Explanation attached to this section provides the definition of work. In this definition payment to a hotel for boarding does not fall within the ambit of work. The assessee has not hired services of any event organizer. It simply booked the hotel for boarding. The hotel did not work on behalf of the assessee as a contractor. Otherwise every guest whosoever stay in a hotel ought to have deducted TDS while making booking or staying in it. The Hon’ble Bombay High Court has considered this issue in the case of East India Hotels vs. CBDT in CWP No.2 104 of 1994. The CBDT had issued a circular bearing No. of 681 dated 8.3.1994 which was challenged in the High Court. The Hon’ble High Court has considered the following question based on the circular and has quashed the circular. The Hon’ble Court held that section 194 C is not applicable for payments made by the customer to the hotel. The first and last three paragraphs of the judgment read as under:
“1. The said circular provides that all service contracts are covered under section 1 94C of the Income Tax Act, 1961 (‘Act’ for short). As a result whereof, every customer of the petitioner No.1 hotel, while making payment to the hotel for occupying its room and availing other facilities /amenities provided by the hotel is required to deduct income tax at the rate specified in section 194C of the Act.”
22. In the present case, we are concerned with the question as to whether the services rendered by the petitioner hotel to its customers is covered under section 194C of the Act?
23. As noticed above, the facilities/amenities made available by the petitioner No.1 hotel to its customers do not constitute ‘work’ within the meaning of section 194C of the Act. Consequently, the circular No.681 dated 8/3/1994 to the extent it holds that the services made available by a hotel to its customers are covered under section 1 94C of the Act must be held to be bad in law.
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Whether A company can deduct TDS for an Individual business for booking air tickets and hotel stay charges as per section 194C.
that Individual business is acting as third party to the company to book tickets.
and bill consists of tickets expenes and service charges separately.whehter TDS can be deducted.
do we have to deduct tds on hotel accomodation bill stayed by our guest if yes how much we have to deduct
we get bookings oh hotel rooms from various travel agents.
Do we need to deduct TDS
Please advice
Thanks
ARUNAVA DASGUPTA
our company will paid to Hotel for Hotel stay charges of Rs. 85000/- now in this case tds applicable or not ? if yes pls give pecentage of tds
our company paid an amount of Rs. 80539 against hotel stat charges can we deduct TDS or not for this case if yes pls give percentage of TDS
on 07.06.16 our company organised a promoter meet at Hotel Empires. which including food and room. The total bill amount is above Rs.50000/-. Shall we deduct TDS. If yes what is the percentage of TDS deduction.
Waiting for your reply.
Recently, our company has appointed a travel agent for booking of all the hotel stay requirement of company’s employee, when they out of city for office work. Agent raises a invoice on a monthly basis for all the booking done by him. However in his invoices, he doesn’t show his service charges separately.
For 1st & 2nd invoice, we have deducted TDS @ 194C on whole amount of invoice. Is this correct approach?
Please tell me tds will be attracted for such payment & under which section?
Mr. Adiga
In my view, Payment to Travel agent would generally fall u/s 194C for hotel booking (provided minimum payment criterion is met).
But, if payments are made for Hotels & Accommodation taken on regular basis (specific hotel / hotel room, etc.), then payment would fall u/s 194I provided minimum Annual payment criterion ie. Rs. 180000/- is met).
It must be seen that hotel/accommodation is taken on regular basis. This condition should be checked thoroughly.
Sir please Please guide us weather TDS is applicable for hotel accommodation charges paid to hotel situated abroad.
Hi Sir,
Please guide us weather tds is applicable for hotel accomidation charges.
SIR KINDLY GUIDE US WE ARE AN ASSOCIATION OF EX STUDENTS OF A COLLEGE DULY REGISTERED WITH THE CHARITY COMMISSIONER AND INCOME TAX. we HAVE INCOME FROM DEPOSIT ON CORPUS FUND ACCUMULATED BY US OF RS 50,000/-IS THERE ANY INCOME TAX PAYABLE ON THE SAME IF YES THEN BY WHICH RATE AND UNDER WHICH SECTION
with reference section 194C regarding nondeuction of tds on hotel booking, our company is booking hotel rooms to our dealers for party through agents. Please clarify whether we have deduct tds to agents payment?