Tds on construction of a premises to be used for renting
This query is : Open
27 November 2013
An individual is doing business as a wholesaler and files his return under the "business" head.
If he makes payment from his saving bank a/c which is not a part of his business balance sheet to a construction co. for construction of a building that will be used for rental purposes and the income will be shown in the Head " House Property",
Will the TDS provisions be applicable?
Does the liability to deduct TDS arise?
Please reply
If he makes payment from his saving bank a/c which is not a part of his business balance sheet to a construction co. for construction of a building that will be used for rental purposes and the income will be shown in the Head " House Property",
Will the TDS provisions be applicable?
Does the liability to deduct TDS arise?
Please reply
27 November 2013
In my opinion
In the first case is he currently under TDS provisions
If no then no need of above.
If yes
Then if an asset is generating income then TDS liability will arise.
But few exceptions lets treat his construction as investment then you can plan for non deduction of TDS. Then in that case when construction is complete then just transfer the investment to Asset and Rent the property.
In the first case is he currently under TDS provisions
If no then no need of above.
If yes
Then if an asset is generating income then TDS liability will arise.
But few exceptions lets treat his construction as investment then you can plan for non deduction of TDS. Then in that case when construction is complete then just transfer the investment to Asset and Rent the property.
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27 November 2013
Yes, he is currently under TDS provisions,
sir, if income is shown in the head "House Property", then will TDS dis-allowance be there? since TDS provisions are applicable under section 44AB which deals with income under the Head "Business/Profession"?
sir, if income is shown in the head "House Property", then will TDS dis-allowance be there? since TDS provisions are applicable under section 44AB which deals with income under the Head "Business/Profession"?
27 November 2013
happy to hear complexity
what i understand once a person complies with TDS provisions under any head then he has to comply the same for all income. i.e only where the expense is relating to his actual income.
In your case currently the capital expenditure is not generating any income so there is no case of disallowance. But you are making an payment of income to the builder so the provisions may attract. Lets keep this open i will also go thru the act again and get back to you.
what i understand once a person complies with TDS provisions under any head then he has to comply the same for all income. i.e only where the expense is relating to his actual income.
In your case currently the capital expenditure is not generating any income so there is no case of disallowance. But you are making an payment of income to the builder so the provisions may attract. Lets keep this open i will also go thru the act again and get back to you.
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27 November 2013
Okay Sir...i will wait for your reply
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