My name is Hardeep Singh.My work is to give taxi to company on hire basis.I send the bill to companies.Some companies say it will cut tds 22% and some company cut 15%.Pl guide me: hardeeptravels371@yahoo.co.in
Therefore, first see whether with each company you are getting rental above Rs 1,80,000 , if not request them not to deduct the tax.
For your ready reference ,section 194I is given as under
“194-I. Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident] any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of
(a) fifteen per cent if the payee is an individual or a Hindu undivided family; and
(b) twenty per cent in other cases :]
As an alternative, you can apply before the Assessing officer under which you file return of income in the form 13 for deduction of tax at lower or NIl rate. If A.O issues such certificate, submit the same with the companies where you ply the taxis , TDS will be done at the rate given in certificate.Down load the Form 13 from here.
Budget Update
The rate of TDS has been proposed to be reduced from 15-20 % to 10 %.
About taxworry
Dear Sir,
The TDS threshold limit you mentioned in figures is Rs 180000. Obviously that was due to oversight. The correct limit as mentioned in the section quoted is Rs 120000/-. Besides I feel you should have also quoted the second proviso to Section 194-I, which makes auditable individuals and HUF also liable to deduct TDS under that section.
Regards,
Sanjeev
Dear Sir,
As per sec.194I rent is defined as below
rent means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,
(a) land; or
(b) building (including factory building); or
(c) land appurtenant to a building (including factory building); or
(d) machinery; or
(e) plant; or
(f) equipment; or
(g) furniture; or
(h) fittings,
whether or not any or all of the above are owned by the payee;]
So, taxy is not covered under any of the above heads. Rental from taxi is liable to TDS u/s 194C
There is subtle difference between provison u/s 194C and 194I as far as plant and machinery are concerned. The diffrence is :
when you have an agreement with a person for carrying passengers (who may be employees) from a place to another or for any purpose and you hire the SERVICE of the taxi operator or transporter or travel agency .In effect you are giving a Contractual work of transporting emplyees .You are not simply hiring the vehicle but hiring a service which is given as per the your choice of vehicle . In that case , dedcution should be done u/s 194C.
But when you hire a taxi or a vehicle without assigning job to the taxi owner, you are simply hiring the tax or vehicle.In that case you are not giving any kind of works contract.Hiring of taxi in such case should be subject to dedcution u/s 194I.
As far as taxi being palnt and machinery, yes it is if the taxi owner carries on business of running taxin on hire.