Tds on rent paid

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

06 December 2013 Hello Sir,

Our director has taken a house property on rent for which the rent agreement is in the name of director.

Now, she wants to make a direct payment to landlord from company's account.

Are the TDS provisions attracted? If yes, under which section?

In books of accounts, should we show it under rent or as salary to director?

Thanks in Advance.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 December 2013 As the rent agreement is in the name of the director, company is not required to deduct TDS on rent and can treat the same as salary to the director. Deduct TDS on salary by including the rent and by considering the HRA exemption, if applicable as per the terms of employment.
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Querist : Anonymous

Querist : Anonymous (Querist)

06 December 2013 Dear Sir,

Can we make a direct payment to landlord from company's Account?

The director wants to make a direct payment instead of any reimbursement.

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 December 2013 Company can make payment to the land lord by an account payee cheque on behalf of the Director.
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Querist : Anonymous

Querist : Anonymous (Querist)

06 December 2013 But we can't claim it as rent expenses.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 December 2013 1. Your Auditors can object in this matter.
2. TDS has to be deducted by the company to which the landlord may not like.
3. If you provide Rent Free Accomodation to the director 15% of Salary will be added as
the value of perquisite.
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