23 August 2009
Dear Expert please clarify my doubt, Fact: The (Assessee) Proprietor firm has converted in to a private Ltd Company in the middle of the year that is in the May 2009. FY: 2009-10 and AY-2010-11 Query: Following are the queries/ doubt I want to clarify: • If the assesee paying the Rent to an Individual for his corporate office Rs. 20,000 p.m then what will be rate of TDS? Is it 20.06 % or 15.45%. • And if the assessee has deducted the TDS at 15.45 % till July 09 then can he deduct the short deduction in the subsequent month. • Since the assessee has converted to Pvt co then should the rent agreement be changed or an affidavit will be enough.
Kindly clarify my doubt on urgent basis. Thanks in advance
24 August 2009
Since rent is paid to an individual the rate of deduction of TDS is 15.45% . Deduction of TDS as for as the rate is concerned is based on the status of the deductee.Therefore deduction at 15.45% even if the firm is converted into a company.
Separate rental agreement has to be entered into between the company and the owner of the building
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