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Who is this guide for? If you own or operate an automobile repair workshop, car service centre, two-wheeler garage, or multi-brand vehicle service station in India, this guide covers your complete income tax obligations for AY 2026-27 (FY 2025-26): how your income is classified, which Section 44AD rules apply, which ITR form to file, GST on repair services and spare parts after rate rationalisation, workshop equipment depreciation, used oil disposal compliance, TDS obligations, and deductible business expenses.
India has an estimated 5 to 7 lakh automobile repair workshops and garages, ranging from roadside two-wheeler mechanics to multi-brand car service centres with hydraulic lifts and computerised diagnostics. With over 226 million registered vehicles on Indian roads and growing, the aftermarket repair and maintenance industry is one of the largest service sectors in the country. Despite this scale, most garage owners file their income tax returns with incorrect business codes, miss legitimate deductions on workshop equipment, or fail to comply with used oil disposal regulations that carry serious penalties.
This guide covers every tax obligation an auto mechanic or garage owner faces, from income classification to GST on repairs and parts, workshop equipment depreciation, hazardous waste compliance, TDS obligations, and ITR filing. If you are in a related business, see also our guides for cab drivers and delivery partners, contractors and sub-contractors, and e-commerce sellers.
How Garage Owners Earn Income
Automobile workshops generate revenue from multiple streams, often combining repair labour with spare parts trading, body work, and annual maintenance contracts:
Tax Rate Chart
Common Revenue Streams for Automobile Workshops
Typical ranges; actual revenue varies by location, vehicle segment, and service mix
Mechanical Repair and Servicing
Engine overhaul, brake repair, clutch replacement, periodic servicing, oil change
Spare Parts and Accessories Sales
Filters, brake pads, belts, batteries, lights, wipers sold alongside repair
Denting, Painting, and Body Work
Accident repair, scratch removal, full body painting, insurance claim work
AC Servicing and Electrical Repair
AC gas refill, compressor repair, wiring harness, alternator, starter motor
Tyre and Wheel Services
Tyre replacement, wheel alignment, wheel balancing, puncture repair
Annual Maintenance Contracts (AMC)
Fleet clients, taxi operators, corporate vehicle maintenance
Source: Industry estimates based on FADA and Tax Garden client data (FY 2025-26)
A small two-wheeler repair shop with 15 to 30 vehicles per day typically earns Rs 8 lakh to Rs 25 lakh annually. A mid-size car workshop with two to four bays earns Rs 30 lakh to Rs 1.5 crore. A multi-brand service centre with computerised diagnostics and insurance tie-ups can earn Rs 2 crore to Rs 10 crore or more. Workshops handling fleet maintenance contracts add a separate revenue stream with different invoicing and TDS obligations.
Income Classification: Business Income
Running an automobile repair workshop is business income under the head "Profits and Gains of Business or Profession." It is not a specified profession under Section 44AA.
The specified professions are: legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, authorised representative, company secretary, information technology, and film artist. Automobile repair is not in this list.
This means you use Section 44AD for presumptive taxation, not Section 44ADA.
Tax Rate Chart
Section 44AD vs 44ADA: Why Garages Use 44AD
Comparison of presumptive taxation schemes for AY 2026-27
Section 44AD (Business) - Digital Receipts
Applies to workshop receipts via UPI, card, bank transfer, insurance settlements
Section 44AD (Business) - Cash Receipts
Cash payments from walk-in customers; common in smaller workshops
Section 44ADA (Profession) - All Receipts
NOT applicable to automobile workshops; only for specified professions
Source: Income-tax Act, 1961 (Sections 44AD and 44ADA)
At 6% deemed profit on digital receipts versus 50% under Section 44ADA, the difference is massive. A garage with Rs 80 lakh turnover (70% digital) would have Rs 5.28 lakh deemed profit under 44AD (Rs 56 lakh x 6% = Rs 3.36 lakh, plus Rs 24 lakh x 8% = Rs 1.92 lakh) versus Rs 40 lakh under 44ADA. Using the wrong section means paying several times more tax than required.
Business Code for ITR Filing
Selecting the correct business code in your ITR form prevents defective return notices and processing delays.
Tax Rate Chart
Business Codes for Automobile Workshops and Garages
Use the code that best matches your primary business activity
09002 - Repair and Maintenance of Motor Vehicles
Standard code for automobile workshops, garages, and service centres
09003 - Sale of Motor Parts and Accessories
If your primary revenue is spare parts trading rather than repair services
09001 - Wholesale and Retail Sale of Motor Vehicles
Only for authorised dealerships that sell vehicles and provide service
Source: Income Tax Department ITR form instructions (AY 2026-27)
Most standalone garages should use 09002. If you both repair vehicles and sell spare parts (which most workshops do), 09002 is still the correct code because repair is your primary activity and parts are incidental to the repair service. Use 09003 only if you run a pure auto parts shop with no repair services.
Presumptive Taxation Under Section 44AD
Most automobile workshops with turnover up to Rs 2 crore (or Rs 3 crore if cash receipts are 5% or less of total turnover) can use Section 44AD presumptive taxation.
Tax Rate Chart
Section 44AD Turnover Limits for Automobile Workshops (AY 2026-27)
Section 44AD, Income-tax Act 1961 (FY 2025-26)
Cash Receipts More Than 5% of Turnover
Common for smaller workshops with significant cash walk-in payments
Cash Receipts 5% or Less of Turnover
Workshops with predominantly UPI, card, and insurance settlement payments
Source: Section 44AD, Income-tax Act 1961
How deemed profit works for a garage
Under Section 44AD, your taxable profit is deemed at:
- 6% of turnover received through digital modes (UPI, card, NEFT, RTGS, account payee cheque, insurance claim settlements via bank)
- 8% of turnover received in cash
You are not required to maintain books of accounts. All business expenses (rent, spare parts purchases, employee wages, electricity, equipment maintenance) are deemed included in the 6% or 8% rate.
Example: An automobile workshop with Rs 60 lakh annual turnover (Rs 45 lakh digital including insurance settlements, Rs 15 lakh cash):
- Digital deemed profit: Rs 45 lakh x 6% = Rs 2,70,000
- Cash deemed profit: Rs 15 lakh x 8% = Rs 1,20,000
- Total deemed profit: Rs 3,90,000
- Tax under new regime: Nil (Rs 3,90,000 is below the Rs 4 lakh basic exemption; the Section 87A rebate would cover income up to Rs 12 lakh anyway. There is no standard deduction for business income)
When to opt out of 44AD
Automobile workshops typically operate on net margins of 10% to 20% after parts cost, rent, and wages. If your actual profit is lower than the 6% to 8% deemed rate (unusual but possible with heavy rent in metro locations, large unsold inventory, or equipment EMIs), you can declare actual profit with full books of accounts, and a tax audit is needed if your total income exceeds the basic exemption limit. However, if you opt out after using 44AD, you cannot return to 44AD for the next five years (Section 44AD(4)).
Composite income: repair labour plus spare parts
Most workshop invoices combine labour charges and spare parts in a single bill. For Section 44AD purposes, the total invoice value (labour plus parts) counts as your turnover. You do not need to split labour and parts for income tax purposes. GST treatment is different and covered below.
GST on Vehicle Repairs and Spare Parts
The GST 2.0 rate rationalisation effective 22 September 2025 simplified GST for automobile workshops significantly. Earlier, spare parts attracted 28% GST while labour was at 18%. Now both are at a uniform 18%.
Tax Rate Chart
GST Rates for Automobile Workshops (2026)
Post GST 2.0 rationalisation effective 22 September 2025
Repair and Service Labour (SAC 998714)
Engine repair, brake service, clutch work, AC servicing, electrical repair, periodic servicing
Spare Parts and Accessories (HSN 8708)
Filters, brake pads, clutch plates, bearings, gaskets; reduced from 28%
Tyres (HSN 4011)
All motor vehicle tyres; reduced from 28%
Lubricants and Engine Oil (HSN 2710)
Engine oil, gear oil, brake fluid, coolant
Batteries (HSN 8507)
Lead-acid and lithium-ion vehicle batteries
Denting, Painting, Body Work (SAC 998714)
Classified as maintenance and repair of transport equipment
Source: GST Council notifications post-September 2025 rationalisation
For more details on vehicle GST rates, see our guide on GST on cars and vehicles in India and HSN and SAC codes.
Composite supply vs mixed supply
When a workshop issues a single invoice covering both labour and spare parts for a repair job, this is a composite supply where the repair service is the principal supply. The entire invoice attracts 18% GST. You do not need to split GST rates between labour and parts on the same invoice if both components are naturally bundled as part of a single repair transaction.
If you sell spare parts separately without any repair service (a customer walks in and buys a filter), that is a standalone sale of goods at 18% GST under HSN 8708.
GST composition scheme for workshops
Small workshops with aggregate turnover up to Rs 50 lakh can opt for the service provider composition scheme under Section 10(2A) at a flat 6% (3% CGST + 3% SGST). Key restrictions:
- No input tax credit (ITC): You cannot claim ITC on spare parts purchased, which significantly reduces margins
- No inter-state supply: You cannot service vehicles for clients in other states
- No tax invoices: You issue a bill of supply, which means your fleet and corporate clients cannot claim ITC on your invoices
- Parts-heavy workshops lose out: If spare parts constitute 40% to 60% of your revenue, losing ITC on purchases makes composition unviable
Most workshops are better off under regular GST registration. The 18% rate with full ITC on parts purchases typically results in lower effective tax than 6% composition without ITC. See our detailed guide on the GST composition scheme.
GST registration threshold
GST registration is mandatory if aggregate turnover crosses Rs 20 lakh (Rs 10 lakh in Manipur, Mizoram, Nagaland and Tripura). Most workshops cross this threshold within the first year. If you sell spare parts online through an e-commerce platform, you can do so below the threshold only for intra-state sales under the conditions notified from 1 October 2023; inter-state sales of goods through a marketplace require registration regardless of turnover.
ITC on workshop purchases
Under regular GST registration, you can claim input tax credit on:
- Spare parts purchased from distributors and wholesalers
- Workshop equipment and tools
- Rent for workshop premises (if landlord charges GST)
- Professional services (CA fees, legal fees)
You cannot claim ITC on:
- Motor vehicles for personal transport (Section 17(5)); petrol and diesel are outside GST, so no ITC arises on fuel
- Food and beverages for staff (unless provided as an obligation)
- Construction of immovable property (workshop building construction)
Workshop Equipment Depreciation
If you file ITR-3 with full books of accounts, you can claim depreciation on business assets under Section 32 of the Income-tax Act, 1961.
Tax Rate Chart
Depreciation Rates for Automobile Workshop Equipment (WDV Method)
Section 32 read with Appendix I; not claimable separately under Section 44AD
Hydraulic Car Lift and Two-Post Lift
Plant and machinery; essential for undercarriage and suspension work
Air Compressor and Pneumatic Tools
Impact wrenches, spray guns, tyre inflators
Wheel Alignment and Balancing Machine
Plant and machinery; computerised alignment systems
Welding Equipment and Denting Tools
Arc welders, MIG welders, hydraulic dent pullers
Laptop or PC-based Diagnostic Systems and Software
Computers including computer software; a standalone OBD scanner tool is generally plant and machinery at 15%
Computers and Billing Systems
Garage management software, POS computers (CCTV cameras are plant and machinery at 15%)
Furniture, Waiting Area, Display Racks
Customer seating, parts display shelves, counters
Source: Income Tax Rules, Appendix I, Table of Depreciation Rates
Half-year rule: If an asset is used for less than 180 days in the financial year of purchase, depreciation is restricted to half the applicable rate (for example, 7.5% instead of 15% for a hydraulic lift first put to use in November).
Tip for garage owners: Computers, laptop-based diagnostic tools, and garage management software attract 40% depreciation (computers including software), higher than the 15% rate for mechanical equipment. When buying diagnostic equipment, keep invoices that show the computer and software component separately so each is classified correctly.
Used Oil and Hazardous Waste Compliance
This section is critical for every garage owner. Non-compliance carries legal penalties including fines and operational shutdown.
Used engine oil, gear oil, brake fluid, and coolant generated by your workshop are classified as hazardous waste under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016.
What you must do
- Store properly: Keep used oil in sealed, leak-proof containers with labels indicating "Hazardous Waste - Used Oil." Store away from water sources and direct weather exposure
- Hand over to authorised recyclers only: Used oil may only be given to recyclers or re-refiners authorised by the State Pollution Control Board. Selling used oil to unregistered scrap dealers, roadside oil collectors, or unregistered recyclers is illegal
- Maintain Form-10: Every consignment of used oil leaving your workshop must be accompanied by a Form-10 Hazardous Waste Movement Document. This form tracks the waste from your facility to the authorised recycler
- Keep records: Maintain a register of used oil generated, stored, and dispatched with dates, quantities, and recycler details
Tax treatment of used oil
Revenue from selling used oil to authorised recyclers is business income. Include it in your turnover for income tax and GST purposes. GST at 18% applies on the sale of used oil (HSN 2710).
Penalty for non-compliance
The liability for improper disposal stays with the generator (your workshop), not with the unauthorised dealer you sold it to. Penalties include fines under the Environment Protection Act, 1986, and potential suspension of your trade license by the local municipal authority.
Other workshop waste
Used tyres, scrap metal from replaced parts, and used batteries also have specific disposal requirements. Scrap metal and used batteries can be sold to registered scrap dealers. Used tyres can be sent to authorised tyre recycling units. Revenue from all scrap sales is business income.
Deductible Business Expenses (If Not Using Section 44AD)
If you maintain full books of accounts and file ITR-3, you can claim the following expenses:
Tax Rate Chart
Major Deductible Expenses for Automobile Workshops
Claim only if filing ITR-3 with full books; not applicable under Section 44AD
Spare Parts Purchases (Cost of Goods Sold)
Largest variable cost; maintain purchase invoices from distributors
Workshop Rent
Fully deductible; TDS if rent exceeds Rs 50,000 a month (10% u/s 194-I, or 2% u/s 194-IB for individuals not liable to audit)
Employee Wages (Mechanics, Helpers)
Fully deductible; deduct TDS under Section 192 if taxable
Electricity
Three-phase power for compressors, lifts, painting booths is significant
Consumables (Oil, Grease, Cleaning Agents)
Workshop consumables not billed separately to customers
Insurance (Workshop, Equipment, Fire)
Equipment insurance, public liability insurance, fire insurance
Source: Tax Garden client data and industry benchmarks (FY 2025-26)
TDS Obligations for Garage Owners
Garage owners must deduct TDS on certain payments. The thresholds changed from 1 April 2025 (Finance Act 2025). An individual or HUF owner has to deduct under Sections 194C, 194J and 194-I only if the workshop's accounts were liable to tax audit under Section 44AB(a) or (b) in the previous year (otherwise Sections 194M and 194-IB apply at 2% above their thresholds).
Tax Rate Chart
TDS Obligations for Automobile Workshops
For payments from 1 April 2026, these fall under Sections 392 and 393 of the Income-tax Act, 2025
Rent Payment (Section 194-I / 393(1) Sl.2(ii))
If rent exceeds Rs 50,000 for a month or part of a month; replaced the Rs 2.4 lakh annual limit from 1 April 2025
Contractor Payments (194C / 393 Sl.6(i))
Towing contractors, specialised repair subcontractors, cleaning services
Employee Salary (Section 192 / Section 392)
Mechanic salaries, helper wages; deduct based on estimated annual income
Professional Fees to CA (194J / 393(1) Sl.6(iii))
If annual CA fees exceed Rs 50,000
Source: Income-tax Act 1961 (Sections 192, 194C, 194-I, 194J); Income-tax Act, 2025 (Sections 392, 393)
TDS on subcontractor payments
If you outsource specialised work (AC gas refilling, computerised wheel alignment, paint booth work) to external contractors, deduct TDS at 1% (individual/HUF) or 2% (others) under Section 194C if a single payment exceeds Rs 30,000 or total payments to the contractor exceed Rs 1,00,000 in the financial year.
Insurance claim settlements
When insurance companies settle claims for accident repair work done at your workshop, the payment comes through banking channels and counts as digital turnover (6% deemed profit under 44AD). Check Form 26AS for any TDS deducted on these payments and verify all insurance settlements in your AIS (Annual Information Statement) before filing ITR.
Disallowance for non-deduction
If you are required to deduct TDS but fail to do so, 30% of the expense is disallowed under Section 40(a)(ia). A workshop paying Rs 12 lakh annual rent without deducting TDS faces Rs 3,60,000 disallowance, directly increasing taxable income.
For detailed TDS guides, see our posts on TDS on rent, TDS on contractor payments, and the TDS rate chart 2026-27.
Tax Audit Requirements
Automobile workshops are subject to tax audit under Section 44AB based on turnover:
Tax Rate Chart
Tax Audit Thresholds for Automobile Workshops (AY 2026-27)
Section 44AB, Income-tax Act 1961
Cash Transactions Over 5% of Total
Standard audit threshold; walk-in cash payments common in smaller workshops
Cash Receipts and Cash Payments Each 5% or Less
Workshops with predominantly UPI, card, and insurance settlement payments
Profit Below 44AD Deemed Rate
Turnover within the 44AD limit but profit declared below 6%/8% (Section 44AB(e) read with 44AD(5))
Source: Section 44AB, Income-tax Act 1961
Due date for tax audit report: normally 30 September of the assessment year. For AY 2026-27, CBDT extended it to 21 October 2026 (and the ITR due date for audit cases to 21 November 2026).
Penalty for non-compliance: 0.5% of turnover or Rs 1,50,000, whichever is lower.
ITR Form Selection
Tax Rate Chart
ITR Form for Garage Owners (AY 2026-27)
Select based on your taxation scheme and income sources
ITR-4 (Sugam)
Using Section 44AD; total income up to Rs 50 lakh; no capital gains other than 112A LTCG up to Rs 1.25 lakh; no foreign assets or income
ITR-3
Turnover above Rs 2/3 crore; full books maintained; claiming actual expenses and depreciation
ITR-3
Total income above Rs 50 lakh, capital gains beyond ITR-4 limits, or more than one house property
Source: CBDT ITR form applicability rules for AY 2026-27
For step-by-step filing guidance, see our guides on ITR-4 Sugam filing and ITR-3 filing. For help choosing between forms, see ITR-2 vs ITR-3 vs ITR-4 comparison.
Old Regime vs New Regime for Garage Owners
The new tax regime is default for AY 2026-27. Garage owners should compare both:
Tax Rate Chart
Tax Regime Comparison for a Garage Owner
Example: Taxable income Rs 10 lakh under Section 44AD (after deemed profit calculation)
New Regime (Default)
Slab tax Rs 40,000 fully rebated; no standard deduction for business income
Old Regime (Opt-In Required)
Can claim 80C, 80D, 80GG but must opt in via Form 10-IEA by the due date
Source: Income Tax slabs AY 2026-27
For most garage owners using Section 44AD with total income below Rs 12 lakh, the new regime results in zero tax due to the rebate under Section 87A. If your income exceeds Rs 12 lakh and you have significant deductions (home loan, 80C investments, health insurance), compare both regimes before filing.
Advance Tax for Garage Owners
Garage owners using Section 44AD must pay their entire advance tax by 15 March of the financial year. Unlike regular businesses that pay advance tax in four quarterly instalments, Section 44AD taxpayers get a single-date exemption.
If you do not use Section 44AD and your tax liability is Rs 10,000 or more in a financial year, you must pay advance tax in four instalments: 15 June (15%), 15 September (45%), 15 December (75%), and 15 March (100%). Failure to pay attracts interest under Section 234B and 234C.
For due dates and payment process, see our guide on advance tax due dates FY 2026-27.
ITA 2025 Section Mapping for Garage Owners
The Income Tax Act, 2025 applies from 1 April 2026 (Tax Year 2026-27 onwards). Returns for AY 2026-27 (FY 2025-26) are still filed under the 1961 Act, so the old section numbers above apply to them. Key TDS mappings for payments from 1 April 2026:
Tax Rate Chart
Key ITA 2025 TDS Section Numbers for Automobile Workshops
Rates and thresholds carried over; section numbers and payment codes changed
Section 192 (TDS on Salary)
Payment codes 1001 to 1003
Section 194-I (TDS on Rent)
Codes 1008 (plant and machinery, 2%) and 1009 (land and building, 10%); Rs 50,000 a month
Section 194C (TDS on Contractor)
Codes 1023 (individual/HUF, 1%) and 1024 (others, 2%)
Section 194J (Professional Fees)
Code 1027 (professional fees, 10%)
Source: Income-tax Act, 2025; Finance Bill 2026 memorandum
For complete mapping of all sections, see our ITA 2025 section mapping guide.
Common Mistakes Garage Owners Make
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Wrong business code in ITR: Using a generic service code instead of 09002 (Repair and maintenance of motor vehicles) can trigger mismatch notices. Using a profession code is worse as it implies 44ADA applicability.
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Not separating personal and business finances: Many garage owners use the same bank account for personal expenses and workshop transactions. This creates audit complications and makes it difficult to track actual turnover accurately.
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Selling used oil to unregistered dealers: Handing used engine oil to unregistered scrap dealers or roadside collectors is illegal under the Hazardous Waste Management Rules, 2016. The legal liability stays with your workshop, not with the buyer.
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Missing TDS on rent: Workshops required to deduct TDS that pay rent above Rs 50,000 a month without deducting it face disallowance of 30% of the rent expense under Section 40(a)(ia).
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Not claiming ITC on spare parts under GST: Workshops on regular GST registration can claim ITC on spare parts purchased from distributors. Many garage owners fail to reconcile purchase invoices with GSTR-2B, leaving ITC unclaimed.
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Ignoring insurance settlement reconciliation: Insurance claim payments for accident repair work appear in your AIS. If you do not reconcile these with your reported turnover, the income tax department may issue a mismatch notice.
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Not maintaining equipment purchase invoices: Workshop equipment like hydraulic lifts and alignment machines are capital assets eligible for depreciation. Without purchase invoices, you cannot claim depreciation if you file ITR-3.
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Composition scheme with parts-heavy revenue: Workshops where spare parts are 40% or more of revenue lose more on ITC denial than they save on the lower 6% composition rate. Run the numbers before opting in.
Checklist for Garage Owners Before Filing ITR
- Confirm your income is classified as business income (not profession)
- Use business code 09002 in ITR-4 or ITR-3
- Choose Section 44AD if turnover is up to Rs 2 crore (or Rs 3 crore if cash receipts are not more than 5%)
- Calculate deemed profit at 6% digital and 8% cash receipts
- Include insurance claim settlements in digital turnover
- Include scrap and used oil sales in total turnover
- Deduct TDS on rent above Rs 50,000 a month
- Deduct TDS on contractor payments above Rs 30,000 single or Rs 1 lakh aggregate (if you are liable to deduct)
- Cross-check AIS for insurance settlements and other reported transactions
- Pay advance tax by 15 March (Section 44AD) or in quarterly instalments
- Compare old and new tax regime for optimal tax outcome
- File GST returns (GSTR-1 and GSTR-3B) on time with correct SAC 998714 and HSN 8708
- Maintain Form-10 records for all used oil dispatched to authorised recyclers
- Renew trade license and pollution control consent before expiry
Frequently Asked Questions
Which ITR form should an auto mechanic or garage owner file for AY 2026-27?
Most auto mechanics and garage owners file ITR-4 (Sugam) when using Section 44AD presumptive taxation and total income is below Rs 50 lakh. If you maintain full books of accounts, claim actual expenses like equipment depreciation and used oil disposal costs, or your income exceeds Rs 50 lakh, file ITR-3. Running an automobile workshop is classified as business income.
What is the GST rate on vehicle repair services and spare parts in 2026?
After GST 2.0 rate rationalisation from 22 September 2025, both vehicle repair labour charges (SAC 998714) and most automobile spare parts (HSN 8708) attract a uniform 18% GST. Earlier, spare parts attracted 28% GST while labour was at 18%. Tyres also moved from 28% to 18%. Life-saving vehicle components like seat belts remain at 18%.
Can a garage owner use Section 44AD presumptive taxation?
Yes. Running an automobile repair workshop is a business, not a specified profession. Section 44AD applies with deemed profit at 6% on digital receipts and 8% on cash receipts. The turnover limit is Rs 2 crore if cash receipts exceed 5% of total turnover, or Rs 3 crore if cash receipts are 5% or less.
What depreciation can a garage owner claim on workshop equipment?
Hydraulic car lifts, air compressors, wheel alignment machines, and welding equipment qualify as plant and machinery at 15% WDV depreciation. Computers and billing systems attract 40%. Furniture and waiting area fittings attract 10%. Depreciation is only claimable separately when filing ITR-3 with full books of accounts, not under Section 44AD presumptive taxation.
Does a garage owner need GST registration?
A workshop that supplies repair services along with spare parts must register once aggregate turnover, including parts billed to customers, crosses Rs 20 lakh in a financial year, or Rs 10 lakh in Manipur, Mizoram, Nagaland and Tripura. The higher Rs 40 lakh limit is only for suppliers of goods alone, and Telangana keeps Rs 20 lakh even for goods. Register before crossing the limit, not after.
Does a garage owner have to deduct TDS on workshop rent?
If your accounts were audited in the previous year, or the workshop is run by a firm or company, deduct 10% under Section 194-I when rent exceeds Rs 50,000 for a month. An individual owner not liable to audit deducts 2% under Section 194-IB only when monthly rent exceeds Rs 50,000. Missing a required deduction can make 30% of the rent disallowed as an expense.
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