TDS For Sure……..??
IN this world of ever changing Technology, everything from buying a pencil to a car is done using smart-phones, similarly the recent growing trend among the working population and also with the students group is to Booking a Cab and availing Coupon credits for first few rides. There are companies which gives first ride free and other exciting offers on their cabs. Let’s get a bit technical now.
What happens actually these companies design their mobile app and have a tie up with people having their personal or rented cars that could be used as cabs. The mobile app allows any customer to log on to the app on registration, the customer is given a unique User ID and a password then the app identifies the nearest cab based on GPS tracking and then books a ride. The payment for these can be made either through cash or through e-payment.
The drivers are enrolled on to the list of drivers for the company , the company pays a fixed sum every month as a drivers commission plus a payment for every booking made in the name of that driver
Analysis of relevant sections of The Income Tax Act 1961
Any specified person responsible for paying any sum to any resident contractor or subcontractor for carrying out any work is required to deduct TDS. There is a threshold limit for transport operator for Goods carriage vehicles, the same is not applicable to these passenger carriage drivers. There is no separate contract type also, if a driver wants to work for say OLA, all he has to do is to register with them, he will be given a tracking device and a cell-phone number. All he has to do is to transport customers from place to place receive money from them and remit the same next day to the company before starting the next day’s work
As the company pays commission to the drivers Commission or brokerage as per Income Tax Act includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person:
(a) For services rendered (not being professional services), or
(b) For any services in the course of buying or selling of goods, or
(c) In relation to any transaction relating to any asset, valuable article or thing, not being securities.
From the plain reading of the section we can come to a conclusion as to deduction of TAX at source for the drivers commission. But will the company agree to it……………….???
It’s a bloating question as to the interpretation of the amount paid as to whether the its in the nature of commission or in the nature of any other payment. But the payment made qualifies as commision in common paralance