14 October 2011
If Premises is given for utilization and the compensation is received in 2 ways 1. Rental Income Rs 15,000/- Per month 2. Charges for Services provided for amenities Rs 10,000/- Per month.
14 October 2011
If the service charges are for furnitures and fixtures in the flat then it satisfies the criteria for rent. TDS to be deducted on Rs. 25000pm @10% u/s 194I as the payment exceeds Rs. 180000.
But if the service charges are of other services like electricity, water, guard etc then it is in the nature of professional services. In such case payment under 194I is 15000*12 = 180,000 - dont deduct TDS (as payment does not exceed 180000) For other services deduct tds on Rs10000*12 = Rs120000 @10% u/s 194J
15 October 2011
Only if they are actual, it would qualify as reimbursement. But if they are fixed charges, you cannot say them to be of reimbursement nature !
15 October 2011
The arrangement between the tenant and landlord is important. Let us discuss the situation practically. If the payment for services is of gross nature (no bifurcation is provided) how will the tenant know how much he is paying for water, how much for electricity, how much for general maintenance, guard, gardening etc.. He has to deduct TDS on gross amount for all practical purposes. Moreover, how will the tenant come to know how much of the electricity charges paid is fixed part. It is of no concern to him, when he is paying a fixed lumpsum amount every month.
15 October 2011
I am not questioning what you are saying. But Sir, practically it is not possible as the tenant is never seeing the electricity bill physically. He knows what he has to pay and that is the fixed amount.
CAclubindia
