Section 194C TDS on Transporters
Direct Definition
Income tax deducted at source by corporate payers on freight payments to contractors.
Detailed Explanation & Statutory Rules
Corporate shippers deduct 1% TDS (for individual/proprietorship transporters) or 2% TDS (for company transporters) on payments exceeding ₹30,000 single or ₹1,00,000 annual aggregate. Transporters owning 10 or fewer trucks can submit a declaration with PAN to receive payments with 0% TDS.
Legal Reference / Act: Section 194C of the Indian Income Tax Act, 1961.
Practical Indian Freight Example
"On a ₹1,00,000 freight bill, the company pays ₹98,000 via NEFT and deposits ₹2,000 (2%) as TDS under Section 194C against the transporter PAN."
Key Questions & Answers
How can small transporters claim TDS exemption under 194C(6)?
Submit a signed declaration affirming ownership of not more than 10 goods carriages along with a copy of your PAN card.
Other Useful Transport Terms:
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