TDS
This query is : Resolved
13 October 2010
hi
If any company made payment to Hotel for boarding(hotel rent) charges more than 180000/-for 150 night then whether the company is laible to deduct TDS on that. the comany is not a travel agent he is doing business of sports activity.
please reply soon
If any company made payment to Hotel for boarding(hotel rent) charges more than 180000/-for 150 night then whether the company is laible to deduct TDS on that. the comany is not a travel agent he is doing business of sports activity.
please reply soon
13 October 2010
no need to deduct tds
13 October 2010
Can you please explain why TDS is not deducted ? or if any notification is there then please provide me that notification
17 October 2010
payment for Hotel rooms on regualr basis will attract TDS 194I subject to thershold limit of Rs.1.80 lakh, so in your query amount is exceeding Rs.1.80 lakh, tds need to be deduct
19 October 2010
A good discussion,. Just want to add one more point that, in the circular 5/2002 one important argument is hidden
“Where earmarked rooms are let out for a specified rate and specified period”, they would be construed to be accommodation made available on ‘regular basis’. Similar would be the case, where a room or set of rooms are not earmarked, but the hotel has a legal obligation to provide such types of rooms during the currency of the agreement
Thus where there is no agreement in place with hotel even if the same room is hired for a longer period, there is no TDS required to be deducted, secondly if the agreement is in place, but no obligation of the hotel to provide the room, the same room is booked even on daily basis, No TDS is required to be deducted. Thus where the , the element of “obligation” and “earmarked” is missing, no need for TDS to be deducted.
Where an agreement is merely in the nature of a rate contract, it cannot be said to be accommodation ‘taken on regular basis’, as there is no obligation on the part of the hotel to provide a room or specified set of rooms. The occupancy in such cases would be occasional or casual. In other words, a rate-contract is different for this reason from other agreements, where rooms are taken on regular basis. Consequently, the provisions of section 194-I while applying to hotel accommodation taken on regular basis would not apply to rate contract agreements
“Where earmarked rooms are let out for a specified rate and specified period”, they would be construed to be accommodation made available on ‘regular basis’. Similar would be the case, where a room or set of rooms are not earmarked, but the hotel has a legal obligation to provide such types of rooms during the currency of the agreement
Thus where there is no agreement in place with hotel even if the same room is hired for a longer period, there is no TDS required to be deducted, secondly if the agreement is in place, but no obligation of the hotel to provide the room, the same room is booked even on daily basis, No TDS is required to be deducted. Thus where the , the element of “obligation” and “earmarked” is missing, no need for TDS to be deducted.
Where an agreement is merely in the nature of a rate contract, it cannot be said to be accommodation ‘taken on regular basis’, as there is no obligation on the part of the hotel to provide a room or specified set of rooms. The occupancy in such cases would be occasional or casual. In other words, a rate-contract is different for this reason from other agreements, where rooms are taken on regular basis. Consequently, the provisions of section 194-I while applying to hotel accommodation taken on regular basis would not apply to rate contract agreements
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