Tds on rent

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kailas patil (Querist)
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03 February 2016 Respected sir,
My employer having hotel provide services like restaurant lodging & laun. He had provide Laun for various programs like marriage, party & meetings etc. & getting rent for that. My query is TDS On REnt is applicable in this case.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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03 February 2016 As per Section 194 I Income Tax Act 1961 provisions, if rent is paid to an assessee in excess of the prescribed limit by the specified persons in excess of the prescribed amount is liable to deduct tax at source @ 10%.

Any person, not being an individual or a H.U.F., who is responsible for paying to a resident any income by way of rent is liable to deduct tax at source as and when aggregate of the amount of such income credited or paid or likely to be credited or paid during financial year exceeds Rs. 1,80,000/-. Individuals or H.U.F.s who were subject to tax audit under Sec. 44AB during the financial year immediately preceding the financial year in which such rent was paid or credited are also liable to deduct tax at source.

There is no provision that the rent should be on a month to month basis or at fixed intervals. If the total rent payable exceeds Rs.1,80,000/- in any financial year the payer is bound to deduct tax at source .

Payments to hotels for holding seminars including lunch:- Where hotels do not charge for use of premises but charge for catering/meal only, then provisions of Sec.194 I would not apply. However, Sec.194 C would apply for catering part.

Therefore, if the marriage hall is contracted for Rs.2,00,000/- and separate charges are levied for catering and other facilities, then TDS would be deductible on the rent under section 194 I. The charges levied for catering at meetings, etc are covered under section 194 C and if the payment exceeds Rs.30,000/- in a single payment or Rs.70,000/- during a financial year TDS @ 1% or 2% should be deducted.