TDS ON MAINTAINENCE

This query is : Resolved

kumar (Querist)
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14 October 2009 WE ARE PAYING RENT AND MAINTENANCE CHARGES TO LANDLORD FOR RENTAL HOUSE. WHETHER TDS IS APPLICABLE ON BOTH THE RENT AND MAINTENANCE ?

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)
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14 October 2009 Yes, if the maintenacne is a fixed amount for every month i.e. not reimbursed against actual expenses incurred. However in on maintenance TDS should be under 194C,i think.

CA Suresh Choudhary

CA Suresh Choudhary (Expert)
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14 October 2009 Generally the maintenance is paid by the land lord and in your case if the amout paid is fixed then it is nothing but a rent so in my view the TDS should be deducted on the entire amount u/s. 194I.

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Nazir

Nazir (Expert)
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14 October 2009 Dear Kumar,

Are you a business man?? r u eligible for tax audit?? as u mentioned in your query that you are paying rent and maintainance charges to your landlord for rented "HOUSE", if you r a tanent and using this house for your staying thr..n not for business purpose then you dont have to deduct TDS on any charges, but if you r using it commercially then for rent you need to deduct TDS u/s 194I (i.e. 10% from oct 09 onwards) and for maintainance u/s 194 C (2% from oct 09 onwards).

Let me know if you still have any doubt.

Nazir

Sreedhar Atchutuni ACA,GradCWA

Sreedhar Atchutuni ACA,GradCWA (Expert)
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14 October 2009 Section 194I says "rent means any payment by what ever name called under any lease, sub lease, tenancy or any other agreement or arrangement".

So both rent and maintenance paid to landlord attracts TDS under section 194I.

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Rajeev

Rajeev (Expert)
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15 October 2009 194-I. Any person, not being an individual or a Hindu undivided family, who is responsible for paying to any person any income by way of rent, shall, at the time of credit of such "INCOME" to the account of the payee or at the time of payment thereof in cash or by the issue of cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the applicable rate

It should be noted that the word used is INCOME

If the rental agreement is made in that kind of a fashion segregrating rent & maintenance ( by way of addition of a MOU)& (which is actually a reimbursement )

and the invoices for rent and maintenance are raised seperately , then i guess TDS need not be deducted on maintenance under any provision.

My view differs ( only advisable in mega rent cases )

there was a clarification by board which stated that service tax is to be excluded , cos its a reimbursement ( Only for 194I)
194C&J - Circular no 715 holds good , cos the words used are "Any sum paid"

chetan soni

chetan soni (Expert)
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15 October 2009 Yes, Maint. charges will be clubbed with rent & same will run by the provisions of sec 194I. If the Maint. charges is paid to any other party then this will be a part of contractor & sec 194C will apply accordingly.