Tds on rent under section 194i of i.t.act

This query is : Resolved

CA Sanjay Baheti (Querist)
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14 March 2014 Dear Experts,

My client being an Individual engaged in manufacturing Activities & also covered under Tax Audit.

My client is paying Factory Rent to individual Landlord @ Rs.10000/- per month till 30.09.2013.Hence No deduction towards TDS on rent @ prescribed rate made till Sept,2013 as monthly rent is less than 15000/-p.m or annually less than Rs.180000/-also.

Now From Oct,2013 & on wards the Monthly Rent stepped up from Rs.10000/- to Rs.25000/-.Therefore now there is need to deduct TDS on rent as per rule i.e.@ 10% on Monthly Rent of Rs.25000/- being Rs.2500/- for every month from Oct,2013 to till March,2014.So total TDS deductions towards rent for F.Y.2013-14 is Rs.15000/- (i.e.2500*6)

However if we consider total rent paid to landlord during F.Y.2013-14 that comes Rs.210000/-(60000+150000)then on annually basis TDS deductions should be made Rs. 21000/- for F.Y.2013-14.

Now query is whether my client has to deduct additional TDS Deduction of Rs.6000/- based on Annual Rent in the month of march,2014 or not.

Please reply urgent.

CA Jitender Sharma

CA Jitender Sharma (Expert)
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14 March 2014 Dear Sanjay,
Your client has to deduct this addtional Rs 6000 tds from March payament. Other wise this tds amount along with penal interst on short deduction will be charged by department.

CA JITENDER SHARMA