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    Tax for transport and logistics operators in India

    Transport tax depends on goods versus passengers. Goods carriages (where you own up to 10 vehicles) use the per-vehicle Section 44AE scheme (Rs 7,500/month light, Rs 1,000/tonne/month heavy, no books); passenger transport (taxi, auto, app cab, bus) uses Section 44AD at 6 or 8%, not 44AE. A small goods transporter who gives a PAN and declaration suffers no freight TDS under Section 194C(6); app-cab drivers have 0.1% deducted by the platform under Section 194O and the platform pays the GST on rides under CGST Section 9(5). Goods transport by road is 5% (no credit) or 18% (with credit) GST since the 12% option was abolished.

    Presumptive + GST + TDS at a glance

    Presumptive taxation

    Section:
    Sec 44AE (goods carriages) or 44AD (passenger)
    Deemed profit rate:
    44AE per-vehicle / 44AD 6% digital
    Classification:
    business

    GST treatment

    Slab:
    5%
    SAC:
    9965/9966: goods transport (GTA) 5% no-ITC or 18% with ITC; app/radio passenger cab 5% no-ITC (platform pays under 9(5)); non-AC stage carriage exempt
    Composition eligible:
    No
    Reverse charge (RCM):
    Applicable

    TDS exposure

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    Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact Income Tax Department. Read our editorial scope →

    Transport tax turns on one split: goods or passengers. The business of plying, hiring or leasing goods carriages uses the per-vehicle presumptive scheme under Section 44AE (available where you own up to 10 vehicles), while passenger transport (taxi, auto, app cab, bus) is a business under Section 44AD, not 44AE. The TDS and GST then follow that split. A small goods transporter (up to 10 carriages) who gives a PAN and declaration suffers no freight TDS under Section 194C(6); an app-cab driver has 0.1% TDS deducted by the platform under Section 194O and, helpfully, the platform pays the GST on the ride under CGST Section 9(5).

    What business structure do transport and logistics operators use?

    The common patterns for transport and logistics operators are: Sole proprietor, common for owner-drivers and small truckers (44AE or 44AD), Partnership or LLP, for a transport firm, Private limited, for a logistics company or fleet operator. The right structure depends on revenue, liability exposure, and personal circumstances, covered below.

    Goods (44AE) vs passenger (44AD)

    If you run goods carriages and own up to 10 of them, you use Section 44AE: deemed income of Rs 7,500 per month for a light vehicle (up to 12 tonnes) and Rs 1,000 per tonne of gross vehicle weight per month for a heavy vehicle (over 12 tonnes), with no books. Passenger transport (a taxi, auto, app cab or bus) is not eligible for 44AE, it is a business under Section 44AD at 6 or 8% of turnover, or on regular books. So the same person owning a truck and a taxi would use 44AE for the truck and 44AD for the taxi. Get the split right, it determines your whole income-tax computation.

    Goods carriages (up to 10 vehicles) use per-vehicle 44AE; passenger transport uses 44AD at 6 or 8%, not 44AE. (Income-tax Act 1961 s.44AE (goods carriages) + s.44AD (passenger business) (consolidated into the Income-tax Act 2025 s.58))

    TDS: the small-transporter exemption and app drivers

    Two TDS rules matter. Under Section 194C(6), a goods transporter who owns up to 10 carriages and gives the payer a PAN and a declaration suffers no TDS on freight, the client can pay gross. Without the declaration, freight attracts 194C at 1 or 2%. For app and aggregator drivers (Ola, Uber, Rapido), the platform deducts 0.1% TDS under Section 194O on gross earnings above the Rs 5 lakh-a-year threshold, which the driver reclaims and reports under 44AD. So a small trucker can often receive freight TDS-free, while an app driver has a small platform deduction.

    A small goods transporter (up to 10 carriages, with PAN and declaration) suffers no freight TDS under 194C(6); app drivers have 0.1% deducted by the platform under 194O. (Income-tax Act 1961 s.194C(6) (small-transporter exemption) + s.194O (e-commerce/aggregator, 0.1%) (Income-tax Act 2025 s.393))

    GST: app platforms pay, and the GTA choice

    For app-cab rides, CGST Section 9(5) makes the platform the deemed supplier, so the platform pays the GST and the driver does not charge GST on platform rides, a real simplification for app-only drivers. For goods transport by road (a goods transport agency, GTA), the choice since Reform 2.0 on 22 September 2025 is 5% with no input credit or 18% with input credit (the old 12% option was abolished), and reverse charge can apply for certain recipients. A non-AC stage carriage (ordinary public bus) is exempt from GST, while a radio or app taxi is 5% with no input credit.

    App-cab platforms pay the GST under CGST 9(5); goods transport by road (GTA) is 5% no-ITC or 18% with ITC (12% abolished); non-AC stage carriage is exempt. (CGST Act 2017 s.9(5) (platform as deemed supplier) + GTA rate notifications (5%/18%, Reform 2.0 22 September 2025))

    Allowable expenses

    CategoryExamplesTax treatment
    Fuel and runningDiesel, petrol, CNG, tolls, maintenanceDeductible on regular books; in deemed profit under 44AE/44AD
    Vehicle financeLoan or EMI interestInterest deductible on regular books
    StatutoryRoad tax, permits, fitness test, insuranceDeductible business outgoing
    Drivers and crewDriver wages, cleanersDeductible if keeping books
    AdminAccounting, GST filing, app commissionDeductible (apportion personal use)

    Vehicle and travel costs

    The vehicle is the core business asset. On regular books, running costs, loan interest and depreciation are deductible; under 44AE (goods) or 44AD (passenger) these are treated as included in the per-vehicle or percentage deemed profit.

    Capital allowances and equipment

    On regular books, goods and passenger vehicles depreciate (commercial vehicles generally at higher rates than private). Under 44AE or 44AD no separate depreciation is claimed, but keep invoices for the written-down value on any later sale.

    Worked example

    Harpreet — Ludhiana, PB

    owner-driver with three light goods trucks (2026-27)

    Owns three light goods vehicles (each under 12 tonnes) used for freight, and gives his clients his PAN and a declaration.

    Because he owns up to 10 goods carriages, he uses Section 44AE: deemed income of Rs 7,500 per month per light vehicle, so 3 vehicles for 12 months = Rs 7,500 x 3 x 12 = Rs 2,70,000 deemed income, with no books. Because he gives a PAN and declaration under Section 194C(6), his clients pay freight without deducting TDS. If instead he drove a taxi, that passenger income would not qualify for 44AE, it would be a business under Section 44AD at 6 or 8%.

    Common audit triggers for transport and logistics operators

    Frequently asked questions

    Should a transporter use 44AE or 44AD?+
    It depends on goods versus passengers. A goods-carriage operator who owns up to 10 vehicles uses Section 44AE (per-vehicle deemed income, Rs 7,500/month light or Rs 1,000/tonne/month heavy). Passenger transport, a taxi, auto, app cab or bus, is not eligible for 44AE and uses Section 44AD at 6 or 8% of turnover, or regular books. The same owner could use 44AE for a truck and 44AD for a taxi.
    Do I pay TDS on freight as a small trucker?+
    Not if you qualify under Section 194C(6). A goods transporter who owns up to 10 carriages and gives the payer a PAN and a declaration suffers no TDS on freight, the client pays gross. Without the declaration, freight attracts 194C at 1 or 2%, which you would later reclaim. So giving the PAN declaration is worth doing for cash flow.
    Do Ola and Uber drivers charge GST?+
    No, not on platform rides. Under CGST Section 9(5), the app platform is the deemed supplier and pays the GST on the ride, so the driver does not charge GST on platform trips. The platform also deducts 0.1% income-tax TDS under Section 194O on earnings above the Rs 5 lakh-a-year threshold, which the driver reclaims and reports under Section 44AD.
    What GST applies to goods transport by road?+
    A goods transport agency (GTA) can charge 5% with no input credit or 18% with input credit, the old 12% option was abolished under Reform 2.0 on 22 September 2025. Reverse charge can apply for certain recipients (the recipient pays the GST). A non-AC stage carriage (ordinary public bus) is exempt, while a radio or app taxi is 5% with no input credit.

    Last reviewed: