Tds on rent

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Ashima Bansal (Querist)
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11 March 2012 one of my client is paying rent for his shop rs.16000/- per month for the f.y 2010-11.but the rent is paid through cheques in the name of two persons of rs.8000/- per month to each of them(they both are husband and wife).my querry is that does my client is liable to deduct tds on these payments.please help me.

CA Prashant Gupta

CA Prashant Gupta (Expert)
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11 March 2012 TDS limit is 120,000/- on rent. this will calculate on basis of per person or entity.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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11 March 2012 The threshold limit w.e.f 1/7/2010 is Rs.1,80,000/- per annum.
If the landlord's are co owners , rent can be shared among them in the ratio of legal ownership, meaning thereby the above said cap can be applied to each of the co owner's.

Citation :- Amalendu Sahoo Vs. ITO (2003) 264 ITR 16 (CAL).

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Mihir Doshi

Mihir Doshi (Expert)
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12 March 2012 Limit is increased from INR 120,000/- to 180,000/-.

In this case rent is shared by two person, so limit individually apply to both, and no need to deduct TDS in your case. Please check the ownership percentage or have a discussion with land lord.

Thanks
Mihir Doshi

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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12 March 2012 CBDT Circular 715 dated 8/8/1995 reported in 215 ITR (St) 16 says as follows:-
If there are a number of payees, each having a definite and ascertainable share in the property, the limit of Rs.1.80 lacs will apply to each of the payees / co-owners separately.

Mihir Doshi

Mihir Doshi (Expert)
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12 March 2012 Agree with Expert.

Ashima Bansal

Ashima Bansal (Querist)
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12 March 2012 thanks you experts for your help.but how we will come to know about the percentage share of ownership .landlord is not ready to show the property papers.but in rent agreement it is mentioned that rent will be paid to both husband and wife.