TDS on Rent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2011 we are paying rent of Rs.161252/- (including service tax)per month to a company and we have received a certificate relating to deduction of Tax source. stating that pay or credit rent amount up to rs.1754328 after deducting income tax at the rate of 1% (excluding education cess/ surcharge as applicable). how much can i deduct TDS.

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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10 May 2011 Tax in this case has to be deducted on rent excluding service tax, i.e. basic amount of rent and if the land lord has the lower deduction certificate, then deduct at 1% only.

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CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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11 May 2011 If you just see ... the certificate amount is equal to one years rent excluding service tax as TDS is applicable only on rent (excluding service tax)

so. monthly rent excluding rent is = 161252/110.3% = 146194/-

So your monthly TDS would be 146194 X 1% = 1462/-

Just remember one thing, the rent excluding service tax figure, should not exceed 146194 X 12 > 1754328/- during the financial year. If it exceeds, you have to apply normal TDS rate on the differential amount.

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Querist : Anonymous

Querist : Anonymous (Querist)

12 May 2011 shall we deduct TDS on Common Area Maintenance Fee(contract)including service tax amount.
Our CAM charges is Rs.24067/-p.m(including Service Tax)and we have received a lower deduction certificate for 0.25% for the FY 2011-12 and what would be the TDS amount and what would be the payable amount to the land lord.
Is the Tds is comes under 194C.

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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13 May 2011 This comes under section 194C and in this case, tax has to be deducted on the amount inclusive of service tax. Here, you should deduct Rs. 60 per month from the maintenance.