TDS on transporters for freight, Rules and general legal requirements as per Income Tax Act - Professionals - Taxation - TIK Share
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TDS on transporters for freight, Rules and general legal requirements as per Income Tax Act


CA Pulkit Sharma

2013-12-29

Tax deduction on Source (TDS) is a major source of revenue for government and government dont want to leave any chance of getting it.

Income Tax Act have many rules where directly or indirectly tax payers suffers if TDS is not complied proprly.

FEW faqs of TDS on Transporters:

Is TDS chargeable on Transporters?

No Transporters are exmpted from TDS subjected to some conditions.

When TDS on Transporters is applicalbe and payers should deduct the Tax?

If transport arrangements are out of Contracts and for a specific period than TDS is applicable under section 194(c).

If transporter dont have PAN in that case TDS should be deducted?

If transporter dont have PAN than TDS should be done at 20% irrespective of whether the transport arrangement is for contract or others.

Example for above faqs:

Suppose company A avails transport services for 5 lakhs.

Situation 1. Company had a contract with Transporter for 6 months for the freights.

TDS to be deducted as per section 194(c)

Situation 2. No contract was made and freight was paid to random transporters.

TDS is not applicable.

Situation 3. Transporter dont have PAN.

TDS is to be deducted at 20%