Tds on rent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 June 2012 We are into the business of construction and redevelopment of property. As you may be aware that the builder/developers give a monthly payment to flat owners in case of redevelopment so that the flat owners can shift to some other place till the property is redeveloped. We are debiting this monthly amount to compensation. Will this attract TDS on rent provisions or any other head under TDS chapter

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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22 June 2012 IF the amount is paid to tenant in lieu of permanent alternate accomodation till the time of reconstruction, then TDS will be deducted u/s 194I. The Nomenclature is not important for the purpose of section 194I.
Rent means any payment by whatever name called under any tenancy also.

However if the compensation is paid for demolishing the existing stucture then it will be a capital receipt in the hands of tenants and no TDS will be deducted.