TDS
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
15 January 2011
A company hire 5 Airconditioners on rent and paying Rs. 7000/- Qtrly. Is any requirement of TDS deduction?
What is the maximum limit of amount on which TDS should be deducted in above case and at what rate????????????
What is the maximum limit of amount on which TDS should be deducted in above case and at what rate????????????
15 January 2011
TDS exempt up to 180000 P.A.
15 January 2011
In the given case Sec 194I will be attracted.
Threshold limit (Total amount paid to a single party on Account of Rent)--
Rs 120000/- p.a. upto 30.06.2010
Rs 180000/- p.a. from 01.07.2010
If threshold limit crossed TDS to be deducted on Total amount @2%
Threshold limit (Total amount paid to a single party on Account of Rent)--
Rs 120000/- p.a. upto 30.06.2010
Rs 180000/- p.a. from 01.07.2010
If threshold limit crossed TDS to be deducted on Total amount @2%
15 January 2011
agreed with experts.
It will be treated rent paid for hiring plant & machinery or equipment.
Tds will be deduct only on basic amount not on service tax element if charged.
CIRCULAR NO 4/2008 , Dated: April 28, 2008
Clarification on deduction of tax at source (TDS) on service tax component on rental income u/s. 194-I of the Income Tax Act.
Representations/ letters have been received in the Board seeking clarification as to whether TDS provisions u/s. 194-I of the Income Tax Act will be applicable on the gross rental amount payable (inclusive of service tax) or net rental amount payable (exclusive of service tax).
2. The matter has been examined by the Board. As per the provisions of 194I, tax is deductible at source on income by way rent paid to any resident. Further rent has been defined in 194I as
” rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,-
(a) land; or
(b) building (including factory building); or
(c) land appurtenant to a building (including factory building); or
(d) machinery; or
(e) plant; or
(f) equipment; or
(g) furniture; or
(h) fittings,
whether or not any or all of the above are owned by the payee;
3. Service tax paid by the tenant doesn’t partake the nature of “income” of the landlord. The landlord only acts as a collecting agency for Government for collection of Service Tax. Therefore it has been decided that tax deduction at source (TDS) under sections 194-I of Income Tax Act would be required to be made on the amount of rent paid/payable without including the service tax.
4. These instructions may be brought to the notice of all officers working in your region for strict compliance.
5. These instructions should also be brought to the notice of the officers responsible for conducting internal audit and adherence to these should be checked by the auditing parties.
F.No.275/73/ 2007-IT(B)
(Ansuman Pattnaik)
Deputy Secretary (ITB
It will be treated rent paid for hiring plant & machinery or equipment.
Tds will be deduct only on basic amount not on service tax element if charged.
CIRCULAR NO 4/2008 , Dated: April 28, 2008
Clarification on deduction of tax at source (TDS) on service tax component on rental income u/s. 194-I of the Income Tax Act.
Representations/ letters have been received in the Board seeking clarification as to whether TDS provisions u/s. 194-I of the Income Tax Act will be applicable on the gross rental amount payable (inclusive of service tax) or net rental amount payable (exclusive of service tax).
2. The matter has been examined by the Board. As per the provisions of 194I, tax is deductible at source on income by way rent paid to any resident. Further rent has been defined in 194I as
” rent” means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,-
(a) land; or
(b) building (including factory building); or
(c) land appurtenant to a building (including factory building); or
(d) machinery; or
(e) plant; or
(f) equipment; or
(g) furniture; or
(h) fittings,
whether or not any or all of the above are owned by the payee;
3. Service tax paid by the tenant doesn’t partake the nature of “income” of the landlord. The landlord only acts as a collecting agency for Government for collection of Service Tax. Therefore it has been decided that tax deduction at source (TDS) under sections 194-I of Income Tax Act would be required to be made on the amount of rent paid/payable without including the service tax.
4. These instructions may be brought to the notice of all officers working in your region for strict compliance.
5. These instructions should also be brought to the notice of the officers responsible for conducting internal audit and adherence to these should be checked by the auditing parties.
F.No.275/73/ 2007-IT(B)
(Ansuman Pattnaik)
Deputy Secretary (ITB
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