Circular No. 6/2006

TAX Deduction at Source - Issue of TDS Certificate under section 203 of the Income-tax Act - Cases of Truck/goods-carriage Operators - Regarding

What this is

Circular No. 6/2006 was issued by the Central Board of Direct Taxes on 23 June 2006. Its subject is TAX Deduction at Source - Issue of TDS Certificate under section 203 of the Income-tax Act - Cases of Truck/goods-carriage Operators - Regarding.

What it does

Reiterates section 203 read with rule 31 in the road transport trade: where goods are booked by the consignor but payment is made by the consignee on delivery and the consignee deducts tax under section 194C, the certificate must go to the truck or goods-carriage operator from whose payment the tax was deducted, and within the prescribed one month from the end of the month of deduction. The Board advises consignees accordingly. It warns that a failure to issue the certificate in time, or issue of it in favour of someone other than the person from whose payment the tax was deducted, attracts section 272A(2)(g), a penalty of one hundred rupees for every day the failure continues.

Why it was issued

Representations said certificates were either not being issued in time or were being issued in favour of the consignor at the truck operator's place, leaving the truck operator unable to claim credit for the tax deducted from his payments.

Who it reaches

Truck and goods-carriage operators whose payments suffer deduction under section 194C
Consignees who make delivery payments and deduct the tax
Consignors named on the booking but not the payment
Assessing Officers levying penalty under section 272A(2)(g)

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.194C	s.393, s.402
s.203	s.395
s.272A	s.465, s.471

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

TAX DEDUCTION AT SOURCE - ISSUE OF TDS CERTIFICATE UNDER SECTION 203 OF THE INCOME-TAX ACT - CASES OF TRUCK/GOODS-CARRIAGE OPERATORS - REGARDING
CIRCULAR NO. 6/2006, DATED 23-6-2006
As per the provisions of section 203 of the Income-tax Act, read with rule 31 of Income-tax Rules, every person deducting tax in accordance with the provisions of the Act shall, within a period of one month from the end of the month during which the tax was deducted, furnish to the person from whose income/payment the tax has been deducted, a certificate to the effect that tax has been deducted, specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as have been prescribed.

However, representations have been received that in the case of the road-transporters, where tax is deducted under section 194C from the payment being made to the truck-operator on delivery of the goods by the consignee, the certificate is either not being issued by the consignee within the prescribed time or the certificate is being issued in favour of the consignor of the goods at the place of the truck-operator. As a result of such irregularities, the truck-operator is not able to claim credit for the tax deducted from the payments received by him.

In consideration of the above and the trade-practice prevailing in the road-transport industry, where the truck or such other goods carriages is booked by the consignor but the payment is made by the consignee on delivery of the goods, the Board hereby reiterates the provisions of section 203, as mentioned above, and advises the consignee to issue TDS certificate in the cases of the truck/goods-carriage operators within the prescribed time and in favour of such truck/goods-carriage operators.

4. It may be clarified in this regard that in case of any failure in timely issue of certificate or in case of issue of certificate in favour of any person other than the person from whose payment tax has been deducted at source, the provisions of section 272A(2)( g) shall be attracted, under which, penalty of one hundred rupees for every day during which the failure continues is leviable.

[F. No. 275/74/2005-IT(B)]

What to watch

The one-month period runs from the end of the month of deduction, and the daily penalty runs for as long as the default continues.
The certificate must name the payee whose payment was deducted from, not the party who booked the truck.
The circular does not itself grant the operator credit; it fixes who must be given the certificate so that credit can be claimed.
It states the section 203 and rule 31 position as it then stood, before the later shift to system-generated certificates; check the rule text for the year at hand.

Where you meet it

In a penalty notice under section 272A(2)(g) to a consignee, and when a transporter's credit for tax deducted at source is denied because the certificate was made out in the consignor's name.

What it names

Rules it names. Rule 31 of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.

It mentions. Circular No. 6/2006

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Circular No. 09/2012 — Section 194C of the Income-tax Act, 1961 - Deduction of TAX at Source - Payments to Contractors & Sub-contractors - Dedu 17 October 2012
Circular No. 13/2006 — Dated 13/12/2006 13 December 2006
Notification No. 163 — Rules/amendment Rules 17 June 2005
Circular No. 5/2002 — 1126. Clarifications on various provisions relating to tax deduction at source regarding changes introduced through Fina 30 July 2002
Circular No. 787 — 227. Guidelines regarding taxation of income of artists, entertainers, sportsmen, etc., from international/national/ loc 10 February 2000
Circular No. 723 — Section 172 l Shipping Business of Non-residents 19 September 1995

← Circular No. 7/2006 · Circular No. 5/2006 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.