TDS on Payment to Transporter Section 194C

In the Budget for 2015-16 certain changes have been announced to section 194C of the Income Tax Act, where details have been provided for TDS rates to be applied for payments to transporters, those engaged in plying. hiring or leasing of goods carriages.

As per the existing provisions contained in sub-section (6) of 194C, no TDS shall be deducted from any sum credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, when he furnishes his PAN, to the person paying or crediting such sum.

This sub-section (6) has been amended so that no TDS shall be deducted from payment made to person mentioned above where such a contractor owns ten or less than ten goods carriages at any time during the previous year and furnishes a declaration to this effect along with his PAN, to the person making the payment to him.

The amendment is effective from 1st June 2015.
Therefore to avoid TDS (under section 194C)  – 2 conditions  to be fulfilled – (a) owns 10 or less than 10 trucks AND (b) submits PAN to the person making the payment.

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