Tds on rent for the house occupaid by director.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 August 2012 sir,
Ours is a Pvt.ltd.Co.One of our company Director hired a house in state capital and paid rent for it.
Can the company reimburse the amount to him.
Whether he has to make TDS on rent payment or Company has to do TDS while reimbursing the same. Kindly suggest me the tax planning.

Amol S Joglekar

Amol S Joglekar (Expert)
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11 August 2012 There is no question of any tax planning. If the rent agreement is in the name of Director, he/she need not deduct the tax; subject to however, the assumption the director individually is not liable under Income Tax Audit.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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11 August 2012 The TDS is required to be deducted by the person who makes the payment towards rent to the owner of the property. Applicability of TDS is to be seen at the time of payment of rent to the owner. TDS can not be deducted again and again on the same income.
Since, it is not the income of the director then how come a company deduct the TDS on it??
It is just a reimbursement of the expense incurred by the director.

TDS will not be deducted.

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Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2012 In this Director in his individual capacity comes under tax audit (as he has another business as proprietor). Rent amount exceeds 194I limit. Whether he needs to do TDS while paying rent to house owner or if the director pays the rent without TDS whether company while reimbursement need to do TDS.

Amol S Joglekar

Amol S Joglekar (Expert)
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14 August 2012 As explained, the person whose case falls under the tax audit, needs to do TDS from the year following the year in which his/her case became liable for tax audit.